UK shop inflation rose to 0.7% in Dec 2025, led by food prices, with weak demand expected to continue in 2026.

UK shop price inflation rose slightly to 0.7% in December 2025, driven by food inflation climbing to 3.3% from 3.0% in November, with fresh food prices up 3.8%. Non-food inflation remained deflationary at 0.6%, supported by promotions on items like toys and books. Retailers reduced some prices to support demand, while falling energy costs and improved crop supplies offered limited relief. Rising policy and regulatory costs may sustain inflationary pressure. Despite inflation likely peaking, weak consumer sentiment and demand for affordability are expected to persist into 2026.