{
  "id": 16681376,
  "title": "Healey warned ‘the dam is breaking’ on shop price inflation",
  "url": "https://urgent.news/2026/10/27/healey-warned-the-dam-is-breaking-on-shop-price-inflation",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-27T00:01:00.000Z",
  "source": {
    "name": "City AM",
    "slug": "city-am",
    "url": "https://www.cityam.com/healey-warned-the-dam-is-breaking-on-shop-price-inflation/"
  },
  "original_language": "en",
  "account": "Chancellor John Healey has been cautioned about the growing concern of surging shop price inflation, as retailers have kept it under control through significant discounts. In October, shop prices increased by 2.1 percent compared to September's 1.4 percent and the three-month average of 1.6 percent, according to fresh data from the British Retail Consortium. Retailers claim that the long-anticipated surge in inflation, triggered by Iran's conflict affecting energy and supply costs, is now materializing. Rising prices of non-perishable goods are primarily responsible for this surge. Food inflation has remained stable at 2.6 percent, while overall food prices rose by 2.9 percent in the year to October, up from 2.5 percent the previous month. Non-food goods saw a steep rise in price inflation, nearly doubling from 0.8 percent in September to 1.7 percent by October.\n\nFollowing the initial strikes by the US and Israel against Iran, experts in the food industry cautioned that the closure of the Strait of Hormuz would lead to a spike in food prices in the UK, similar to the aftermath of Russia's invasion of Ukraine. Initially, the Food and Drink Federation (FDF) projected food inflation could soar by up to 10 percent by the end of the year. However, they later revised their forecast, anticipating a peak of 6.4 percent by next summer.\n\nThe Chancellor faced pressure to reduce expenses for retailers, as food inflation has remained steady at 1.3 percent in recent months. This has made top supermarket bosses, such as Sainsbury's and Tesco, question whether these cost hikes will be passed on to customers. Mike Watkins, head of retail insight at data firm NIQ, mentioned that retailers have managed to slow down the impact of these price increases by heavily discounting products. He noted that with consumers becoming more cautious due to higher energy and fuel costs, retailers will now rely more on promotions to stimulate discretionary non-food spending.\n\nHelen Dickinson, the chief executive of the British Retail Consortium, stated that the \"dam is starting to break on the huge wave of costs retailers have absorbed over the last two years.\" She urged the Chancellor to act before his upcoming Budget, emphasizing that if no changes are made, the recent increase in inflation is just the beginning. The trade body has advised Chancellor Healey to follow a straightforward plan to curb food inflation, including canceling business rate hikes, lowering employment costs, and eliminating expensive packaging taxes.",
  "summary": "The Chancellor has been warned that the “dam is starting to break” on surging shop price inflation, which retailers had kept at bay with heavy discounting. Shop prices rose by 2.1 per cent in the year to October, according to new data from the British Retail Consortium, ahead of September’s 1.4 per cent and the [...]",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}