UK shop price inflation fell in the first week of October bringing some relief for hard-pressed consumers, the new BRC-NIQ Shop Price Monitor showed on Tuesday. 

But the news came at the same time as a warning that UK retail jobs are at risk from potential tax rises.

First those inflation figures. Overall shop price inflation fell to 1% year on year this month. That’s lower than the 1.4% seen in September and the three-month average of 1.1%.

Specific non-food inflation was actually deflation as it has been for some time. And it accelerated as prices fell more than in September (-0.4% this time rather than -0.1%).

Helen Dickinson, chief executive of the BRC, said: “Overall shop price inflation slowed in October, driven by fierce competition among retailers and widespread discounting. Discounts came early to electricals and health & beauty, as retailers started promotions ahead of Black Friday month.

“The IMF recently warned that UK inflation will be the highest in the G7. With the Budget less than a month away, the Chancellor has an opportunity to relieve some of the pressures that are keeping the cost of essentials high.” 

And that leads us on to the warning of potential job losses if the forthcoming Autumn Budget hammers retailers. 

The British Retail Consortium (BRC) and UK Hospitality have raised concerns over plans to make superstores and other large businesses pay higher business rates.

They said hundreds of sites could close, potentially costing 120,000 jobs.

The changes are designed to give the government room to reduce the burden on smaller businesses and it has said they’ll mean a boost for city centres.

But owners of larger businesses have said it may do the opposite as some major ‘anchor’ sites — particularly large supermarkets and department stores — may close.

Helen Dickinson said ministers should agree to an exemption from higher business rates for retailers to “safeguard hundreds of anchor stores and the vital jobs they sustain”.

She explained that the proposed changes would also added to inflation: “Labour’s promised business rates reform must deliver a meaningful cut to retailers’ rates bills, and ensure that no store pays more. Rising employer National Insurance Contributions and a new packaging tax have directly contributed towards rising inflation, according to the Bank of England. Adding further taxes on retail businesses would inevitably keep inflation higher for longer.”