British households face the prospect of higher shop prices if Rachel Reeves announces further tax rises in her November Budget, retail chiefs have warned.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Any further tax rises in the upcoming budget would keep shop prices higher for longer.”

She added: “Ultimately, it is British households who will bear the consequences, positive or negative, of the Chancellor’s decisions.”

The warning comes as retailers grapple with mounting cost pressures from energy, labour, and a new packaging levy due to take effect in October.

The British Retail Consortium and NielsenIQ reported that retail inflation accelerated in September, rising to 1.4 per cent from 0.9 per cent the previous month.

Food price growth remained unchanged at 4.2 per cent annually.

Non-food goods drove the overall increase, with prices falling just 0.1 per cent compared with last year.

This marks a sharp shift from August when non-food products were 0.8 per cent cheaper than twelve months earlier.

The data suggests eighteen months of non-food deflation may be drawing to a close.

Ms Dickinson said: “Households are finding shopping increasingly expensive. The impact on retailers and their supply chain of both global factors and higher national insurance and wage costs is playing out in prices for consumers.”

Retailers are under particular strain from elevated labour and energy expenses.

These pressures are especially acute for agricultural producers, with cattle farmers struggling with significant cost increases.

Dairy and beef products have maintained elevated price levels as producers grapple with rising operational expenses.

Home improvement and gardening products also saw notable price increases, contrasting with discounts offered on back-to-school items such as laptops.

Retailers used promotions to ease pressure on families preparing for the new academic year.

Despite these targeted discounts, inflationary pressures are extending beyond grocery aisles into wider retail categories.

The Bank of England expects broader consumer price inflation to reach 4 per cent this month, double its target rate.

Consumer anxiety about personal finances has intensified as inflation persists across the retail sector.

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With inflationary pressures persisting, many shoppers remain concerned about their personal finances and are becoming increasingly price-sensitive.”

Mr Watkins added: “As a result, retailers are likely to continue offering promotions and deals in the coming weeks to help maintain sales momentum.”

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Retailers have sought to shield customers from the full impact of rising costs.

However, their capacity to absorb these pressures appears increasingly limited as higher taxes, energy bills, and wage costs converge ahead of the November Budget.