Shop prices rising at fastest pace in more than two years

See more This is Money on Google - save us as a Preferred Source Updated: 02:41 EDT, 1 September 2026 Shop prices are rising at their fastest pace in more than two years adding to the cost of living pressure squeezing UK households.The British Retail Consortium (BRC) said prices rose by 1.5 per cent last month, up from 0.9 per cent the month before and the highest since February 2024.It comes as consumers are already being hit by a series of increases in energy bills – and threatens to derail Andy Burnham’s ambitions to ease the burden on household finances.The BRC’s shop price index is a narrower gauge than official inflation figures, which cover a wider basket of goods and services. Shop prices rose by 1.5% in August, the fastest pace since February 2024 But its rise is still likely to add to concerns that hard-working families will be finding it tougher to make ends meet – leaving them less likely to splash out beyond the essentials.BRC chief executive Helen Dickinson said: ‘The months ahead look challenging for households, with rising bills putting further pressure on budgets.’She said soaring operating costs for retailers meant it was harder for them to keep prices in check without affecting investment and jobs.It comes at a time when firms are being hammered by higher employer national insurance, rising minimum wages and botched business rates reform.‘If the Government is serious about supporting growth while keeping the cost of living in check, it must address the cost of doing business, including by tackling the growing burden of business rates, packaging and employment taxes,’ Dickinson said.The BRC’s figures showed non-food inflation rose sharply from 0.2 per cent in July to 0.9 per cent in August, the highest since February 2024.And food inflation climbed from 2.2 per cent to 2.8 per cent, the highest since April this year.Dickinson said the impact of higher energy and commodity costs on firms were ‘beginning to filter through into prices’.This was particularly true of so-called ‘ambient’ foods that can be stored at room temperature such as tinned goods or breakfast cereal, which are typically imported and processed, adding cost.Meanwhile, electrical prices are rising because the artificial intelligence (AI) boom is forcing up the price of memory chips and storage, Dickinson added.Wider inflation is rising because of Donald Trump’s Iran war, which has choked off oil and gas supplies from the Middle East.That has notably pushed up energy prices, with regulator Ofgem announcing last week that the cap on household energy bills will rise by 4 per cent from October to a three-year high and forecasters predicting a further 9 per cent hike in January.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you