LONDON, June 27 (Reuters) – British shop price inflation
slowed this month, offering a bit of respite for households hit
by a surge in the cost of living and higher borrowing costs, a
survey showed on Tuesday.
The British Retail Consortium said prices in supermarkets
and retail chains rose by 8.4% in June compared with the same
month last year, down from May’s 9.0% annual increase which was
the highest rate since the BRC’s records began in 2005.
The fall in shop price inflation was the second this year
after the BRC reported a slight dip in April.
Food prices rose less slowly for a second month in a row but
at 14.6% the increase continued to represent a big strain on the
households of many families.
“If the current situation continues, food inflation should
drop to single digits later this year.” BRC chief executive
Helen Dickinson said.
Retailers cut the price of staples such as milk, cheese and
eggs while clothing and electrical goods also saw falling
prices, she said.
Earlier this month, Tesco, Britain’s biggest
retailer, said food inflation had peaked.
The Bank of England last week raised borrowing costs to
their highest since 2008, taking its benchmark Bank Rate to 5%,
as it ramped up its fight against inflation that has fallen more
slowly than it hoped.
“If global supply chain costs continue to fall, we may now
be past the peak of price increases,” Mike Watkins, Head of
Retailer and Business Insight at NielsenIQ which co-produces the
data, said.
“However, with most households needing to save money,
purchasing behaviour for the rest of this year is still likely
to shift towards essential needs with discretionary consumption
being de-prioritised or delayed.”
The BRC data was based on prices collected June 1-7.
(Reporting by William Schomberg, editing by Andy Bruce)
