Shop price inflation is at its lowest in almost two years
SHOP price inflation has eased to a near two-year low, figures revealed today.
The average charged in shops was up 2.5% year-on-year in February, said trade body the British Retail Consortium and number crunchers NielsenIQ.
That was down from 2.9% in January and is the lowest figure since March 2022.
The sharpest fall was in the price of food, which soared during the cost-of-living crisis.
While average food prices were still 5% higher year-onyear, it was down from 6.1% in January.
Fresh food inflation slowed from 4.9% to 3.4% and “ambient” from 7.7% to 7.2%, as retailers saw costs cool and amid competition between grocers.
Non-food inflation was unchanged at 1.3%, with the price of furniture, electricals and health and beauty products rising, but clothing continued to fall.
BRC chief executive Helen Dickinson said: “Easing supply chain pressures have begun to feed through to food prices, but significant uncertainties remain as geopolitical tensions rise.
“Prices of non-food goods will be more susceptible to shipping costs, which have risen due to the re-routing of imports around the Cape of Good Hope.
“Domestically, retailers face a major rise to their business rates bills in April.” Mike Watkins of NielsenIQ said: “The underlying trend in prices will be downwards over the next few months.
“Since the start of the year, food retailers have reduced prices as well as passing on price cuts coming through supply chains. For high street retailers faced with weaker demand, keeping prices stable over the next few months will be key to encourage customers to spend.”
Lower shop prices will be welcome news for Chancellor Jeremy Hunt ahead of next week’s Budget.
Inflation dropped to 4% in January, said the Office for National Statistics.
But it remains double the Bank of England’s 2% target, prompting speculation about when it will start cutting interest rates.
Separate ONS data out yesterday showed household costs in general rose 5% in the year to December, down from 8.3% in September.