Responding to the latest CPI inflation figures, which show headline inflation remaining unchanged at 3.8% and food inflation falling to 4.5% – and inflation for furniture, household equipment and maintenance falling from 0.8% in August to 0.4% in September – Dr Kris Hamer, director of insight at the British Retail Consortium (BRC), says: “Headline inflation remained unchanged last month, as an easing of food price rises was countered by an increase in transport inflation, notably air fares.
"Food inflation is expected to remain high into 2026 as inflationary pressures from the last Budget continue to filter through, something now being seen in the price of clothing and footwear. With the cost of the weekly shop still significantly higher than last year and the prospect of another tax-raising Budget next month, today’s figures are unlikely to raise consumer spirits. Nonetheless, consumers will have been happy to see the price of key staples such as rice, bread and cereal fall on the month.
“With the IMF warning that UK inflation will be the highest in the G7, the Chancellor must use the upcoming Budget to tackle rising prices head on. Retailers, already operating on tight margins, have been hit with £7b in additional taxes this year alone – costs they simply can’t absorb. The Government must use what levers it has to hold back the rising tide of inflation. Reform of business rates – delivering a meaningful cut for retailers with no shop paying more – would drive and help deliver better value for customers.”
Andrew Phillips, MD of V12 Retail Finance, comments: "Inflation in the UK remains stubbornly high and persistent, coming in at 3.8% in September, marking the third consecutive month at this level. On a slightly more positive note, the Bank of England had projected headline inflation to peak at 4% in September before beginning to ease. There was broader consensus around this forecast, so the actual figure has come in below expectations, for now.
"Meanwhile, the InMF forecast last week that UK households will face the highest inflation rate in the G7 both this year and next.
"For consumers, there are some encouraging signs on the horizon. Annual food price inflation has eased slightly to 4.5%, down from 5.1% in August – the first slowdown since March. There is also increasing expectation that the Bank of England may act sooner than expected, with a potential quarter-point rate cut now anticipated in February 2026 rather than March. This would lower borrowing costs for consumers, although it may also lead to a reduction in savings rates.
"In the medium term, the broader outlook remains unchanged. Attention will now turn to the Chancellor’s Autumn Statement, particularly given the pressing need to reignite economic growth."
