Prices in British store chains rose at the slowest pace in over a year in October, according to industry data released by the British Retail Consortium (BRC). This adds to the signs that the country’s high inflation rate is expected to continue its decline.
The BRC reported that annual shop price inflation dropped to 5.2% in October, down from 6.2% in September. This is the weakest rate of inflation since August 2022. The decline was driven by a decrease in food price inflation, which fell for the sixth consecutive month to 8.8% from 9.9%. However, food prices did increase slightly on a month-on-month basis after experiencing the first fall in over two years in September. Non-food inflation also eased to an annual rate of 3.4% from 4.4%.
Helen Dickinson, Chief Executive of the BRC, highlighted that imported goods had been subject to higher levels of inflation due to a weaker pound, high producer costs, and emerging trade frictions. However, she noted that some domestically produced foods, such as fruit, experienced lower prices compared to the previous month.
Dickinson took the opportunity to call on finance minister Jeremy Hunt to prevent a significant rise in business rates tax paid by retailers. She warned that an increase in business rates could lead to a renewed rise in shop price inflation. Hunt is scheduled to deliver a budget update speech on November 22.
The broader official consumer price index in Britain has fallen from a peak of over 11% in October last year to 6.7% in both August and September of this year. The Bank of England paused its series of interest rate increases in September after 14 consecutive hikes. It is expected to keep rates unchanged again on Thursday. However, the bank has emphasized the likelihood of maintaining high rates for a period of time to combat inflationary pressures in the economy.
The recent data indicates that there may be some relief for consumers in terms of rising prices. However, it also serves as a reminder that challenges remain, especially for retailers and the impact of a weaker pound. The upcoming budget update speech by Jeremy Hunt will be closely watched to see if any measures are introduced to address these concerns. The Bank of England’s decision on interest rates will also be of interest, as it looks to find the right balance to combat inflation while supporting economic growth.
More detail via Daily Mail Online here… ( Image via Daily Mail Online )