FX.co ★ UK Shop Price Inflation Hits Near 2-Year High

In January 2026, UK shop price inflation experienced a significant rise of 1.5% compared to the previous year, marking its highest point since February 2024. This increase surpassed the anticipated 0.7% rise, primarily driven by elevated business energy expenses and the impact of the National Insurance hike, which are progressively influencing prices. Non-food prices reversed their previous trend by increasing 0.3% year-on-year in January, contrasting with December's 0.6% decline and moving away from a three-month average decrease of 0.3%. Meanwhile, food inflation accelerated to 3.9% from December’s 3.3%, outpacing the three-month average of 3.4%. Fresh food inflation notably climbed to 4.4% from 3.8%, and ambient food inflation rose to 3.1% from 2.5%, both exceeding recent average levels. According to Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), the surge in shop price inflation is attributed to high energy costs and tax increases, with commodities such as meat, fish, and fruit particularly impacted due to constrained supply and increased demand.