Shop prices in the U.K. picked up at a faster annual pace in August, fresh data showed on Wednesday. The rise was due to a surge in food prices.
The British Retail Consortium - Nielsen Shop Price Index increased 1.7% from a year earlier, faster than the 1.5% rise in July.
Food inflation increased to 3.8% from 2.5% in July, the highest since July 2009. Non-food inflation, on the other hand, slowed to 0.5% from 1%.
BRC said past rises in the cost of global commodities, such as wheat and sugar, are filtering through to food prices. Global wheat prices have seen a sharp surge in value following a drought in Russia, one of the world's largest exporters.
"But we're nowhere near the return of the double-digit inflation of two years ago," said BRC director general Stephen Robertson. "Despite its recent increase, wheat is over a third cheaper than its peak in 2008, while oil prices are virtually half of what they were back then."
The group said retailers were offering more attractive deals to counter rising prices, with milk and bread being particularly competitive battlegrounds. "A third of groceries are now on promotion and customers are shopping around," said Robertson.
Official consumer price inflation in the U.K. has been running over the 3%-mark, although this has been blamed on temporary factors. The high inflation has prompted one Bank of England policymaker to vote for a interest rate hike from the current record low of 0.5%.
But other senior policymakers have been steadfast in their commitment to keep interest rates frozen at their record lows, as Britain recovers from its worst post-war recession. The Bank of England begins a two-day monetary policy meeting today, with analysts forecasting no change in policy.
The BRC shop price index measures price changes on 500 of the most commonly bought items in shops and serve as an indicator of inflationary pressures in the economy. The index comprises of five main sectors of purchase, namely, food, hardware, furniture, electrical and clothing.
Separate data showed that the U.K. job market slowdown continued in August with permanent job placements rising at the weakest rate for 10 months.
The Recruitment and Employment Confederation and KPMG Report on Jobs survey found that demand for staff also moderated during the month, with weaker increases recorded for both permanent and temporary workers.
Pay pressures also weakened, with permanent staff salaries rising at the slowest rate for seven months, while temporary staff pay growth was at a five-month low.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.