ISSUE NO. 22 · WEDNESDAY 2 SEPTEMBER 2026

Shop prices at a two-year high, an energy cap written in the Strait of Hormuz, and £16,350 of stamp duty nobody legislated

1.5 per cent. That is shop price inflation in the year to August, against 0.9 per cent a month earlier and a three-month average of 1.2 per cent. It is the fastest pace in over two years, and food did most of the work at 2.8 per cent against 2.2 per cent in the previous reading.

Nobody announced it — and that is the thread running through everything below. The energy cap rose 4 per cent because of rocket launchers near the Strait of Hormuz. A London first-time buyer now hands over £16,350 in stamp duty because a threshold stopped moving while prices did not. Three price rises, no announcement, no vote, no minister at a despatch box.

Below in full: why the shop price line turned in a single month, how Gulf shipping risk becomes a sterling figure on a British bill, and what a frozen threshold costs somebody buying their first home. After those, the numbers, today’s diary, and one calculator worth five minutes.

Lead

Prices in the shops rose 1.5 per cent in the year to August. The month before it was 0.9 per cent.

That is not a drift, it is a step change, and the British Retail Consortium puts the cause on energy and commodity costs moving down the supply chain. Food inflation reached 2.8 per cent, up from 2.2 per cent, reversing a downward trend that had held for most of 2026 — and food is the line households read first. The wider figure sits above its own three-month average of 1.2 per cent, which is what makes a single month look like a turn rather than noise. The Bank of England has already flagged inflation topping four per cent if the Strait of Hormuz stays closed to oil and gas shipping. A rate of 1.5 per cent is not a crisis on its own; the direction is what matters, and it changed in one month while energy costs were still filtering through to the shelves. Read the full story →

The Numbers

Bank Rate is 3.75% into the 17 September decision and CPI is still July’s 2.9%, a figure that jumped on the last energy cap reset — which is worth holding in mind next to the cap card below, because Ofgem has flagged another rise in January. The index gave up 0.32% on Tuesday, and the FTSE 250 fell 1.67% — 418 points — the day after closing at a twelve-month high.

More News

Brent climbed towards $91 a barrel. The number that matters to British households is £1,723.

The oil move followed US strikes on Iranian rocket launchers near the Strait of Hormuz, the first military exchange in over a month. What turns that into a domestic number is Ofgem’s default tariff, lifted 4 per cent to £1,723 for the fourth quarter — £60 a year, or £5 a month. UK inflation jumped to 2.9 per cent in July after the last set of cap resets, so the mechanism is not theoretical; it has already shown up in the headline rate once this year. Ofgem has flagged a further rise in January. Oil at war prices is not really a headline problem for British households, it is a scheduling one: the cap converts Gulf shipping risk into a sterling figure months after the event, and January’s review is already loaded. Read the full story →

The average London home costs 14.7 times average earnings once stamp duty, national insurance and income tax come out.

The ratio is the symptom; the cause is that bands and thresholds stopped moving while prices did not. Most homes in the capital now sit above the £500,000 first-time buyer relief cap, which leaves an average stamp duty charge of £16,350 due at completion. Add the deposit and the fees and a typical London purchase takes £70,000 of up-front cash — more than twelve years of saving on average earnings in the capital. Nobody legislated a tax rise for people buying their first home. The threshold simply held still, prices did not, and £16,350 now arrives with the keys, which is hardly the ladder the phrase suggests. Read the full story →

The Brief

• Frozen Tax Thresholds Now Hit 1m Pensioners — the same freeze, a different generation.
• 50 Companies Gone and London Keeps Losing More — the listings exodus, counted.
• Allica Bank Lifts Its Loanbook 23% to £3bn — lending to the firms the big banks left behind.
• Entain Faces FTSE 100 Reshuffle After £150m Hit — what a quarterly review actually decides.

On the Diary

• Today, 9.30am BST — Working and workless households in the UK, April to June 2026. The household-level read on the labour market, and the one that shows whether job losses are concentrating in the same homes.
• Today, 9.30am BST — Geographical inequalities in young people not in education, employment or training, England. Where the entry-level squeeze is actually landing on a map.
• Tomorrow, 9.30am BST — Business insights and impact on the UK economy. What firms are reporting themselves, eight weeks out from the Budget.

The Toolbox

One tool from the site each issue, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

UK stamp duty calculator

“If a frozen threshold is what puts £16,350 on a London first home, the useful thing is not the average — it is the number on the actual price you are looking at.”

The Close

Not one of today’s three price rises was decided by anybody you could name. The shop price line turned because energy costs worked their way down a supply chain. The energy cap rose because of rocket launchers three thousand miles away and a formula that translates them into sterling a quarter later. The stamp duty bill grew because a number written years ago was left exactly where it was. That is what makes them hard to argue with: there is no announcement to oppose, no vote to lose, and no minister who has to stand up and own the increase. The costs arrive anyway, and the only real question is whether the next Budget chooses to notice them.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB