UK Shop Prices Rise at Fastest Pace Since 2024 as Spain PPI Cools

Spain’s industrial inflation continued to lose momentum in July. Producer prices rose 0.8% from June and just 0.3% from a year earlier, down sharply from June’s 3.2% monthly jump and 0.8% annual gain. The slowdown suggests further easing in upstream cost pressures for manufacturers after last year’s energy-driven surge. Across the Channel, retail prices are moving in the opposite direction. The British Retail Consortium said shop prices in the United Kingdom rose 0.9% in August from a year earlier, the biggest increase since March 2024 and up from July’s 0.7%. Food costs climbed 4.2%, led by staples such as butter, eggs and chocolate, reflecting poor harvests, higher labour bills and other operating costs. The contrasting data underline divergent inflation dynamics in Europe: Spain’s supply-side pressures are fading, while UK consumers face renewed price rises that risk keeping overall inflation elevated. UK consumer price inflation hit an 18-month high of 3.8% in July, and the Bank of England expects it to approach 4% in September, complicating the outlook for policy makers already wary of persistent cost-of-living strains.