Verified facts: Shop-price inflation slowed to 1.4% in September from 1.5% in August, according to the British Retail Consortium and NIQ. Food inflation fell from 2.8% to 2.5%, while fresh-food inflation declined from 3% to 2.6%. Non-food inflation decreased from 0.9% to 0.8%, although it remained above its three-month average of 0.6%. The report attributes the non-food movement partly to discounting on back-to-school items, including books, stationery, footwear and electrical goods.
The British Retail Consortium said retailer competition and promotions helped reduce meat and dairy prices. It also said poor harvests in Europe increased fruit prices and that high global commodity prices kept chocolate and confectionery prices elevated. NIQ said many retailers had maintained promotions or introduced price cuts to support demand, while warning that households were expected to budget more tightly in the fourth quarter.
Interpretation: The figures indicate that retailer discounting and competition are moderating the rate of shop-price inflation despite pressure from food supply conditions and commodity costs. This suggests retailers are absorbing at least some cost increases to support demand, although the evidence does not establish how long that approach can continue.
Uncertainty and outlook: The report says retailers face higher business rates, employment costs, energy bills and packaging taxes from April, but it does not quantify their likely effect on future prices. The reported expectation of tighter household budgeting is an outlook rather than a confirmed outcome.
