Rising conflict-related costs in the Middle East are starting to influence UK inflation, according to new comments from the British Retail Consortium following the latest consumer price data.
Headline inflation increased to 3.3%, while food inflation rose to 3.7%, according to figures referenced by the organisation in a statement issued on 22 April.
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Harvir Dhillon, Economist at the British Retail Consortium, said: "The first signs of inflationary pressure stemming from the conflict in the Middle East began to emerge last month, driven largely by rising fuel prices."
He said the retail picture remained mixed, with "intense competition" pushing clothing and footwear back into deflation, while grocery retailers faced mounting cost pressures that caused food inflation to edge higher.
Looking ahead, Dhillon warned that if food pricing follows a pattern similar to that seen after the Russia-Ukraine conflict, prices could increase more sharply during the rest of 2026.
He added: "Although the energy price cap and removal of green levies may provide some near-term relief, inflation will rise over the coming quarters as the full impact of the Middle East conflict filters through."
According to the BRC, supermarkets and food supply chains are likely to be among the most exposed sectors because of their higher energy usage. The organisation also warned that lower-income households would be most affected if food prices continue to rise.
Dhillon called on government to target support towards affected retailers, particularly by reviewing non-commodity charges that increase business energy bills. He said this could help reduce the peak in food inflation and ease pressure on household budgets.
The comments underline growing concern within the retail sector that geopolitical instability and energy market disruption may continue to shape pricing and consumer demand through 2026.
More information:
BRC
[email protected]
www.brc.org.uk
