UK shop price rises hit households as energy costs reach tills
Shop prices rose at their fastest annual rate for more than two years as higher energy costs add pressure to household budgets.
Households already paying more to heat and light their homes are now facing fresh UK shop price rises on essential food, with annual shop-price inflation reaching 1.5% in August.
The British Retail Consortium and NIQ said food prices were 2.8% higher than a year earlier, up from 2.2% in July. Packaged and ambient food, the tins, cereals and other cupboard staples that keep a weekly shop going, rose by 2.5%.
UK shop price rises reach the weekly shop
That increase matters most where there is no spare money to shift between bills. Food insecurity already affected 12.2% of UK households in July polling by the Food Foundation and YouGov, rising to 27.1% among single-parent households and 35.9% among households receiving Universal Credit.
The BRC says higher energy, input and commodity costs are beginning to feed into prices, particularly imported and processed food. That is the retailers’ trade body’s account, not proof that energy costs alone caused every rise: weather, harvest conditions, imports and the end of promotions also affect prices.
But the energy pressure on household budgets is not in dispute. The ONS said gas and electricity were the largest upward contributors when CPI inflation rose to 2.9% in July, after Ofgem’s July energy-cap increase. Gas prices rose 14.7% that month and electricity prices rose 3.6%.
A second squeeze before winter
The August shop-price figures come before another cap rise on 1 October. Ofgem says its cap for a typical direct-debit dual-fuel household will rise 4%, from £1,663 to £1,723 a year under its revised consumption measure, largely because of higher wholesale gas prices.
The lower-looking headline figure needs care: Ofgem’s new typical-use measure assumes lower consumption than the old one, and actual bills vary by household, region and tariff. About 20 million households on standard variable tariffs will be affected, while around 11 million on fixed deals will not.
Retailers say they will compete harder on prices through autumn. Yet their own index records the opposite pressure at the checkout as supplier costs are passed on. Working households pay for volatile gas twice: first through the meter, then through the food cupboard.
Government support will soften the blow for some, with around six million households expected to receive the £150 Warm Home Discount. It will not reach everyone already struggling: Citizens Advice estimates 3.5 million households are in energy debt.
