Shop bosses fear inflation will take off again

SHOP price rises are at risk of accelerating again this year, industry chiefs have warned, as retailers are expected to be hit by a wave of higher costs.

Grocery price inflation eased in December, new figures from the British Retail Consortium (BRC) revealed. Food inflation slipped from 7.7pc in November to 6.7pc last month. However, retail bosses said this trend was at risk of reversing, warning that “obstacles on the road” threatened to stoke price inflation again this year.

Helen Dickinson, the chief executive of the BRC, said retailers would continue to do “all they can to keep prices down in 2024”.

However, she said they were facing “new border checks for EU imports and hundreds of millions more on business rates bills from April”. The warning will raise questions for the Bank of England amid expectations that it will start lowering interest rates within the next few months. Investors last month stepped up bets on interest rate cuts after the Office for National Statistics revealed a surprise drop in consumer prices for November, driven by falling fuel and food costs.

The BRC figures released today show that shop price inflation was unchanged in

December at 4.3pc, with fresh and ambient food price rises easing over the month. Non-food inflation rose to 3.1pc in December from 2.5pc in November.

Morrisons yesterday unveiled its latest push on prices. It said it was investing £15m to cut the price of more than 200 products including washing-up liquid and bananas. The supermarket is reducing the prices of its items by an average of 20pc.