Prices in British retail chains rose in August at the slowest pace in nearly a year, according to industry data that offers further relief for consumers hit by high inflation and for the Bank of England which is trying to quash it.
The British Retail Consortium said annual shop price inflation cooled to 6.9% in August, its lowest level since October 2022, weakening from 7.6% in July.
Food Price Inflation
Food price inflation fell to 11.5% from July's 13.4%, driven by slower increases for meat, potatoes and some cooking oils. Non-food inflation held at 4.7%.
The figures would have been lower had the government not increased alcohol duties earlier this month, the BRC said in a statement.
“While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate," commented BRC chief executive Helen Dickinson.
"Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation. A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”
Prices rose in month-on-month terms by 0.5% having fallen the first time in two years in July from June.
Consumer Price Index
The BRC's inflation measure captures prices of goods sold in store and is seen as an early signal for the broader official consumer price index which has fallen from a peak of over 11% last October to 6.8% in July.
However, inflation remains more than three times the BoE's target and investors expect a 15th back-to-back increase in interest rates to 5.5% from 5.25% on Sept. 21 after the Monetary Policy Committee's next scheduled meeting.
Additional reporting by ESM
