Shop prices have risen at their fastest pace in two-and-a-half years, with retail chiefs warning that businesses can no longer absorb mounting costs ahead of tomorrow's Budget. According to the British Retail Consortium, prices were 2.1 per cent higher in October than a year earlier, marking the sharpest increase since early 2024. The sector is now calling on Chancellor John Healey to intervene immediately to prevent further price rises for households.
The British Retail Consortium's chief executive Helen Dickinson said the situation had become critical. 'The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years,' she said. 'The message to the Chancellor ahead of tomorrow's Budget could not be clearer: act now or prices will keep on rising.' The consortium called for the Chancellor to slash employment costs, cancel a planned 3.5 per cent increase in business rates, and remove shops from a high-value surtax.
Food inflation accelerated to 2.9 per cent in October, up from 2.5 per cent in September, driven by rises in pantry staples. Non-food inflation also jumped to 1.7 per cent, approaching three-year highs, as energy and transport costs continued to pressure businesses. The British Retail Consortium warned that without policy changes, October's inflation spike would be only the beginning of further price pressures.
Leading supermarket bosses have echoed these concerns. Sainsbury's chief Simon Roberts last week warned the Chancellor against repeating previous Budgets, specifically highlighting the impact of national insurance taxes on employment costs and their potential to drive food inflation. Marks & Spencer boss Stuart Machin has branded Labour's previous Budgets a 'disaster' and urged the Chancellor to ease restrictions on business. The warnings come as retailers face pressure from conflict in the Middle East, extreme weather and higher costs introduced under the current government.
For UK savers and borrowers, ongoing retail price inflation means the cost of everyday purchases will continue rising unless the government acts to reduce business costs, potentially eroding savings and increasing household expenses on essentials.
The British Retail Consortium called for decisive action, saying: 'Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes. Without a change of course, October's jump in inflation is only the beginning.'