Andy Burnham is under increasing pressure to extend cost of living support as UK shop prices rose at their fastest rate in two years during August.
In-store inflation increased to 1.5% year-on-year in August, up from 0.9% in July, according to data from the research company NIQ for the British Retail Consortium. This rise was largely driven by a 2.5% increase in prices for tinned and packaged food, compared to 1.1% the previous month.
Helen Dickinson, chief executive of the British Retail Consortium, said: “The impact of higher energy, input and commodity costs is beginning to filter through into prices, particularly for ambient foods which are typically imported and processed.”
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She added that electrical goods saw price rises due to the ongoing AI boom, which is increasing the cost of memory chips and storage, while clothing prices remained low as retailers aimed to offer value for families preparing for the new school year.
“The months ahead look challenging for households, with rising bills putting further pressure on budgets,” Ms Dickinson noted.
Ms Dickinson also highlighted that businesses are facing “persistently high operating costs” which limit their ability to absorb price increases. She urged the government to address the costs of doing business, including the rising burden of business rates, packaging, and employment taxes, if it is serious about supporting economic growth while keeping the cost of living manageable.
Despite the pressure on businesses from rising energy costs, government sources indicated that households are unlikely to receive additional energy bill support before the energy price cap review in October. More targeted measures may be considered if there is a further price shock in January.
Labour Party leader Andy Burnham acknowledged on Wednesday that rising energy bills are “difficult for people and I recognise that,” but stopped short of promising further intervention beyond the existing VAT cut. He stated that the government “would continue to look as we go forward at how we get energy prices down in the long term.”
Any future support would be factored into the upcoming budget, with officials closely monitoring developments in the Gulf conflict over the coming months before making decisions, sources added.