UK inflation rose to 3.1% in August as the British Retail Consortium urges the Chancellor to freeze business rates at the Autumn Budget.
The latest Consumer Price Index (CPI) figures from the Office for National Statistics (ONS) showed headline inflation increased from 2.9% in July.
Clothing and footwear inflation, meanwhile, fell to 0.2% in August from 0.5% in July. Housing, water, electricity, gas and other fuels inflation increased to 4.9% from 4.6%, while transport inflation rose to 4.6% from 3.6%.
Food and non-alcoholic beverage inflation remained unchanged at 1.3%.
Harvir Dhillon, Lead Economist at the BRC, said: “Today’s figures highlight the challenging environment retailers face. Headline inflation has increased, with goods such as clothing and accessories seeing marked increases on the month. One bright spot for households was that food inflation remained unchanged, with deals to be had on staple items like olive oil and coffee.
“By working to offer the most competitive prices, supermarkets have managed to shield their customers from the worst of the cost pressures feeding through the supply chain.”
Dhillon said retailers were also facing pressure from higher energy bills, employment costs and packaging fees, alongside business rates.
He called on the Chancellor to freeze business rates, arguing that rising inflation would push up retailers’ rates bills when they are reassessed in April.
“Tackling the cost of living is a top priority and retailers continue to do all they can to hold prices down,” Dhillon said. “But until fiscal conditions improve, they will be fighting with one hand tied behind their back.”
The BRC has previously warned that business rates are placing additional pressure on retailers, with the organisation calling for reforms to reduce the cost burden on high street businesses.
The latest inflation figures come a day after TheIndustry.fashion reported that UK retail employment had fallen to a record-low four-quarter average of 2.78 million in the year to the second quarter. The BRC has attributed part of the decline to a £6.5bn increase in employment costs over the past two years.
The figures highlight the continued cost pressures facing retailers as they enter the autumn trading period, with the sector calling for action on business costs ahead of the Autumn Budget.