Inflation in UK shops drops to lowest in more than a year
Inflation in UK stores fell to the lowest level in more than a year in another sign that the cost-of-living crisis is starting to ease.
The British Retail Consortium said on Tuesday that shop prices were 5.2% higher in October than a year earlier, down from 6.2% in September. It’s the fifth month in a row that inflation in stores has fallen, with the rate at its lowest since August 2022.
The data is a boost to the UK’s Conservative government which has pledged to halve inflation this year. The consumer prices index failed to slow last month, as had been expected, remaining at the fastest rate in the Group of Seven countries.
The Bank of England will decide on Thursday whether to lift rates above 5.25%, with the economy suffering from tepid growth as well as lingering price pressures.
Food price increases decelerated for the sixth month in a row to 8.8% in October, according to the BRC data — the lowest rate since July last year. Domestically produced foods as well as children’s clothing fell in price compared with a month earlier.
As the festive shopping period begins, retailers are at pains to win over customers. Marks & Spencer, Tesco and John Lewis are hiring temporary staff to help boost Christmas sales.
“Retailers have been battling to keep prices down for their customers in the face of rising transport costs, high interest rates and other input costs,” said Helen Dickinson, chief executive officer of the BRC.
Almost a third of British consumers are planning to reduce Christmas spending this year as the burden of lofty inflation weighs on shoppers, according to research from PricewaterhouseCoopers.
“Shoppers have been paying more and buying less,” said Mike Watkins, head of retail and business insight at NielsenIQ, which produces the data for the BRC. “We now need an uptick in sentiment to help retail sales over the next eight weeks.”