UK retail prices picked up again in September as food prices remained elevated and deflation in non-food items receded.
Annual shop price inflation was 1.4% in September, according to the British Retail Consortium and NIQ, the highest since early 2022, having been in deflation at the start of the year.
Non-food deflation of 0.1% compared to a decline of 0.8% in August and 1% in July.
Food inflation remained at 4.2%, as it was in August, up from growth of 4.0% in July, 3.7% in June and 2.8% in May.
"A year and a half of non-food deflation looks set to come to an end, as inflationary pressures spread beyond food," said Helen Dickinson, chief executive of the BRC.
She said DIY and gardening items saw rising prices, though some items continued to see reductions from retailers' promotions.
"Food inflation held steady after seven consecutive months of rises but increased labour and energy costs continue to push up input prices for many farmers, particularly of cattle, with dairy and beef prices remaining high."
Overall shop price inflation was up from 0.9% in August, having risen from negative territory for most of the second half of 2024 and 0.1% in April and May this year, before moving into inflation since June.
Fresh and ambient food inflation both remained above 4%.
Retailers and their supply chain are being hit by both global factors and higher national insurance and wage costs, said Dickinson said, which is is "playing out in prices for consumers".
A new plastic packaging tax, set to take effect in October and designed to provide a financial incentive to push businesses into reducing plastic waste, "will put further upward pressure on inflation", she added.
She insisted that retailers are absorbing higher costs "as much as possible", arguing that any corporate tax rises in the upcoming Budget "would keep shop prices higher for longer" and hit households.
However, large retailers are also raising prices in order to protect their profit margins. Profits were substantial in the past year, with supermarket chains Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) earning £3.1 billion and £1 billion respectively, while clothing retailer Next PLC (LSE:NXT) made its first £1 billion profit.