Shop price inflation accelerated again in July, driven by a sixth consecutive monthly rise in food prices, according to new figures from the British Retail Consortium (BRC) and NIQ.

The latest BRC-NIQ Shop Price Index shows overall shop price inflation rose to 0.7% in July, up from 0.2% in June. Food inflation rose to 4%, up from 3.7% the previous month and ahead of the three-month average of 3.5%.

Fresh food inflation remained steady at 3.2% but the prices of essentials such as meat and tea climbed sharply, with global supply pressures pushing up wholesale costs.

While discounting across clothing and homeware helped keep overall prices in check, it was not enough to offset the mounting cost pressures on retailers — many of whom are passing on rising energy and labour costs to customers.

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BRC chief executive Helen Dickinson urged the government to avoid any further tax hikes in the autumn budget, warning that last year’s £7bn tax increase has already left retailers struggling.

“Retailers are doing everything possible to protect their customers from the worst of the inflationary pressures,” she said.

“But the £7bn cost to retail of last year’s budget forced most retailers to raise prices. Further tax rises will ultimately hurt households, locking in inflation and forcing people to pay higher prices to put food on the table.”

The industry is particularly concerned about a planned rise in business rates for larger stores and supermarkets, which could drive up grocery prices further.

The warning comes as the cost of a weekly shop continues to rise. Separate data from Kantar shows grocery prices rose 4.7% in June — the fastest pace in over a year — with kitchen staples such as butter, chocolate and meat seeing the biggest hikes.

Despite the rising prices, households made 490 million supermarket trips in the past month — the highest level since the pandemic began in March 2020.

Mike Watkins, head of retailer and business insight at NIQ, said: “With inflation on the up, high street retailers will also be concerned about customer retention over the summer holiday season if they are to maintain sales momentum.”

Economists expect inflation to remain above 3% for the rest of the year.

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