Prices at major UK retailers rose at their fastest rate since February 2024 in January, driven by stronger increases in food costs as well as furniture and health and beauty items, according to industry data released on Tuesday.
The British Retail Consortium (BRC) shop price index showed prices were 1.5% higher than a year earlier in January, accelerating from a 0.7% annual rise in December.
Food prices climbed 3.9% year-on-year, up from 3.3% the previous month and marking the sharpest increase since October. BRC chief executive Helen Dickinson said the latest figures show there is little evidence that inflationary pressures have eased.
“Any suggestion that inflation has peaked is simply not borne out by these figures,” Dickinson said. “Shop price inflation jumped this month due to high business energy costs and the hike to National Insurance continuing to feed through to prices. Meat, fish and fruit were particularly affected.”
Non-food prices also picked up, rising 0.3% annually, the strongest increase since February 2024.
Official consumer price inflation (CPI) data for December, which covers a broader range of goods and services, rose to 3.4% from 3.2%. Bank of England Governor Andrew Bailey has said he expects CPI to fall close to the 2% target by April or May, largely reflecting one-off changes in regulated prices and taxes compared with 2025.
Latest CPI figures showed food and non-alcoholic drink prices were up 4.5% year-on-year, below the 5.3% increase forecast by the BoE in November.
From April 2025, employers faced a £25 billion ($34 billion) rise in National Insurance contributions, a change that has hit sectors such as retail particularly hard due to their reliance on lower-paid, part-time workers.
The BRC data is based on prices collected between January 1 and January 7.
