Shop price inflation has reached a two-year high, increasing to 1.5% in the year to August, the British Retail Consortium (BRC) has reported. This marks an increase from 0.9% in July and a three-month average of 1.2%.
The BRC, which represents major supermarkets and high street shops, stated that a surge in energy and commodity costs is filtering through to consumers. Food price inflation also saw a rise, reaching 2.8% from 2.2% in the previous month's reading.
Helen Dickinson, chief executive of the BRC, noted that the impact of higher energy prices and commodity costs is "beginning to filter through into prices." She added that the coming months appear challenging for households due to rising bills.
Economists believe inflation could peak around the turn of the year, provided that hostilities in the Middle East subside and the Strait of Hormuz re-opens for critical oil and gas shipments. The Bank of England has predicted inflation could top four per cent if the Strait remains closed, potentially leading to interest rate hikes.