UK shop price inflation slows to 1.4% in September as BRC urges business rates help

The BRC gauge is a narrow, backward-looking snapshot, so the market is likely to look past the small dip in shop prices and focus on the official inflation path, which is forecast to climb above 4% next year. Energy is the swing factor: oil and gas prices tied to the Iran conflict feed directly into retailers' costs and into the inflation outlook, so diplomacy headlines can move UK rate and sterling expectations quickly. A budget that eases business rates would offer retailers some relief, but it would not remove the wider energy-driven cost pressure. --- Shop price inflation eased again in September, but retailers say they are close to their limit as war-driven costs mount and the budget approaches. Summary: Annual UK shop price inflation slowed to 1.4% in September from 1.5% in August, a little above the three-month average of 1.3%, according to the British Retail Consortium. Food inflation eased to 2.5% from 2.8% as promotions cut meat and dairy prices, although poor European harvests lifted fruit prices and high commodity prices kept chocolate and confectionery elevated. Non-food inflation slowed to 0.8% from 0.9% as heavy discounting lowered the cost of back-to-school essentials. The BRC's chief executive said retailers have absorbed successive cost increases and cited higher business rates in April, rising employment costs, energy bills and packaging taxes. The BRC wants finance minister John Healey to help with business rates in his October 28 tax and spending plan. Broader official UK inflation rose to 3.1% in August and is expected to move above 4% in early 2027 because of the Iran war energy shock. British shop price inflation slowed slightly in September, but the British Retail Consortium warned that retailers are running out of room to absorb the extra costs created by the Iran war. Its survey showed annual shop price inflation easing to 1.4% from 1.5% in August, though the reading was a touch above the three-month average of 1.3%. Food prices drove much