UK shop price inflation ‘highest since 2024’ as retailers struggle to limit price rises

AI desk brief

UK shop price inflation accelerated to 2.1% y/y in October from 1.4% in September, the highest since 2024, as retailers began passing through higher energy and food costs linked to the Middle East conflict. Food inflation rose to 2.9% y/y and non-food inflation more than doubled to 1.7%, while Brent recently touched $117/bbl and UK CPI hit 3.5% last month.

The data reinforce expectations that the Bank of England will raise rates from 3.75% to 4% next week, with a further hike possible in December or early 2027 if retail inflation persists. For precious metals, the inflation impulse and geopolitical energy shock are supportive, but the prospect of additional BoE tightening is a counterweight via higher yields.