Retailers have warned that price pressures could continue to hit shoppers throughout the summer, even if ceasefire talks between the US and Iran prove successful.

Disruption to global shipping, rising energy costs and higher raw material prices are pushing up costs for UK businesses, with the impact already beginning to filter through to shop prices.

Fresh figures from the British Retail Consortium showed shop price inflation rose to 1.2 per cent year on year in May, slightly above the three-month average of 1.1 per cent.

Furniture, health and beauty products were among the categories to see some of the sharpest price rises in recent weeks.

The BRC said high oil prices and the impact of disruption around the Strait of Hormuz had added pressure to retailers’ cost bases.

Retailers have continued to use promotions to attract bargain-hunting shoppers, with TV and audiovisual equipment among the areas where customers can still find discounts as football fans prepare for this summer’s World Cup in the US.

Intense supermarket competition has also helped hold down food price inflation, which fell to 2.7 per cent in May, below the longer-term average of 3.1 per cent.

However, the BRC warned that businesses were finding it increasingly difficult to absorb rising costs.

BRC chief executive Helen Dickinson said: “While retailers work hard to keep prices down for customers, they continue to face significant cost pressures, including higher energy bills and disruption linked to the conflict in Iran.

“Businesses cannot absorb these costs indefinitely, which risks pushing prices higher in the months ahead.”

Dickinson urged the government to reduce the taxes and levies that make up two-thirds of companies’ energy bills, alongside cutting red tape for businesses.

A separate report from the British Chambers of Commerce found that just 16 per cent of businesses said they had not been affected by the turmoil in the Middle East following US and Israeli attacks on Iran.

The BCC warned that even if talks between the US and Iran lead to a ceasefire, the economic impact is likely to persist.

BCC head of trade policy William Bain said: “Even if the current ceasefire soon signals the end of the conflict, the economic reverberations will be felt for many months to come.

“The geopolitical kaleidoscope has been shaken, and there’s no quick fix.

“The ongoing uncertainty over the Strait of Hormuz is deeply worrying for UK businesses relying on that maritime passageway.”

The BCC’s research found that 80 per cent of companies had either already felt an impact from the conflict or expected to do so in future, with energy price increases, shipping disruption and rising raw material costs among the biggest concerns.

Manufacturers have been hit hardest, with 68 per cent of firms saying they had already been affected and a further 23 per cent expecting disruption in future.

Three-quarters of businesses expect their energy bills to rise over the next year, while just over a third warned they may not be able to pay.

Bain said businesses remained exposed to volatile global energy markets, with no equivalent of the household price cap.

“While government has provided some relief for high energy users, most UK firms remain vulnerable to the volatile global market,” he said.

“Ministers should consider funding renewable levies on business bills, roll out a national business energy advice scheme, and strengthen protections for firms against unfair pricing practices.

“In the medium term, accelerating grid reform, improving energy storage capacity and incentivising firms to electrify are essential to insulating our economy against these price shocks.”

A government spokesperson said it recognised the pressure facing businesses and the added costs caused by instability in the Middle East.

They said: “Our new British industrial competitiveness scheme will help tackle this by reducing electricity bills by up to 25 per cent for over 10,000 manufacturing businesses, while our supercharger scheme will cut electricity costs for hundreds of our most electricity-intensive businesses.

“Just last week we announced new support for the chemicals and ceramics industries, and we continue to work closely with businesses and trade unions to ensure we’re doing what we can to help them through tough times.”