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UK shop price inflation slowed in June helped by a second consecutive monthly decline in the growth of food prices, according to the latest industry data.
The cost of shop items rose at an annual rate of 8.4 per cent this month, down from 9 per cent in May and below the three-month average of 8.7 per cent, figures published on Tuesday by the British Retail Consortium showed.
The easing was helped by a slow down in food price growth — where inflation has been particularly acute — to 14.6 per cent in June from 15.4 per cent in the previous month and down from an all-time record high of 15.7 per cent in April.
Sharply rising food costs and high energy prices in the wake of Russia’s full-blown invasion of Ukraine last year have been the main drivers of the cost of living crisis, with inflation in the UK remaining stubbornly high.
“Households up and down the country will welcome the easing of shop price inflation in June,” said Helen Dickinson, chief executive of the British Retail Consortium.
She said fresh food prices were a key driver of the slowdown as retailers cut the cost of many staples, including milk, cheese and eggs. The annual growth of fresh food prices in June was 15.7 per cent, down sharply from 17.2 per cent the previous month.
The price of ambient food inflation — items that can be stored at room temperature — fell slightly to 13 per cent, down from 13.1 per cent in May.
“If global supply chain costs continue to fall, we may now be past the peak of [food] price increases,” said Mike Watkins, head of retail and business insight at NielsenIQ, which helps compile the data.
Official food and non-alcoholic beverages inflation fell to 18.4 per cent in May from 19.1 per cent in the previous month, a further decline from the 45-year high of 19.2 per cent reached in March. The BRC figures suggest the slowdown will continue this month.
The BRC data showed retailers were discounting on clothing and electrical goods, helping non-food inflation ease 0.4 percentage points to 5.4 per cent in June.
But prices remain high by historical standards and Watkins said he expected purchasing behaviour for the rest of this year was “still likely to shift towards essential needs with discretionary consumption being deprioritised or delayed”.
Data published last week showed that household goods sales volumes were 7.6 per cent below their pre-pandemic February 2020 levels, as consumers cut back on purchases in response to higher prices.
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