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UK Shop Price Inflation Accelerates On Food Prices

UK Shop Price Inflation Accelerates On Food Prices
11/7/2012 12:14 AM ET

Shop price inflation in the United Kingdom accelerated in October, as wet summer lifted food prices, a report from the British Retail Consortium (BRC) revealed Wednesday.

Shop price inflation accelerated to 1.5 percent in October from 1 percent in September. Food inflation increased to 4 percent from 3.1 percent in September.

"Overall shop price inflation is still low but pressure from food has edged it up," BRC Director-General Stephen Robertson said.

"Wet summer and higher feed costs are affecting vegetables and meat and poor supplies on world markets are making the ingredients for some manufactured foods more expensive," Robertson added.

According to him, a number of these costs have started to come down over the last quarter, which is likely to ease that pressure in the run up to Christmas.

Non-food prices were broadly flat during the month following a 0.2 percent fall in the previous month.

"This shows how relentless discounting is," Robertson said, adding that discounting is "great for customers" but tough for retailers struggling to make the sums add up.

According to official data, UK consumer price inflation in September was at the lowest level in three years, easing to 2.2 percent from 2.5 percent in August.

The Bank of England is widely expected to retain its asset purchase target at GBP 375 billion at the end of the the Monetary Policy Committee's two-day meeting on November 8.

Governor Mervyn King said last month that the central bank is ready to add more stimulus if the recent positive signs in the economy fade.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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