UK Shop Prices Experience Slowest Growth Since December 2021
Source: The DairyNews
In March, shop prices across the UK witnessed their most sluggish rise in over two years, according to the British Retail Consortium (BRC). This development adds weight to indications that the nation's inflationary pressures are subsiding rapidly.
The BRC revealed that shop price inflation decelerated to 1.3% from February's 2.5%, marking the smallest annual uptick since December 2021. Food prices increased by 3.7%, a decrease from the 5.0% recorded previously, while non-food prices saw a mere 0.2% rise, significantly slower than February's 1.3% hike.
The Bank of England anticipates that the headline inflation rate in Britain will dip below 2% during the April-to-June period, largely due to further declines in energy costs. As a result, investors are currently estimating a roughly 50% likelihood of the BoE implementing an interest rate cut in June—the first since the onset of the COVID-19 pandemic. Interest rate future markets have fully priced in a cut by August.
Helen Dickinson, Chief Executive of the BRC, attributed the slowdown in inflation to heightened competition among retailers, decreasing dairy prices, and enticing discounts on popular chocolate brands, despite certain Easter treats experiencing price increases on an annual basis. However, Dickinson cautioned that retailers are facing mounting cost pressures, which could jeopardize efforts to curb inflation.
She highlighted escalating business taxes, costly recycling proposals, new post-Brexit border checks, and a nearly 10% rise in Britain's minimum wage from March as additional burdens for shops.
The BRC's data, based on prices collected between March 1 and March 7, underscores the shifting dynamics in the UK retail landscape amid ongoing economic changes and regulatory shifts.
The Bank of England anticipates that the headline inflation rate in Britain will dip below 2% during the April-to-June period, largely due to further declines in energy costs. As a result, investors are currently estimating a roughly 50% likelihood of the BoE implementing an interest rate cut in June—the first since the onset of the COVID-19 pandemic. Interest rate future markets have fully priced in a cut by August.
Helen Dickinson, Chief Executive of the BRC, attributed the slowdown in inflation to heightened competition among retailers, decreasing dairy prices, and enticing discounts on popular chocolate brands, despite certain Easter treats experiencing price increases on an annual basis. However, Dickinson cautioned that retailers are facing mounting cost pressures, which could jeopardize efforts to curb inflation.
She highlighted escalating business taxes, costly recycling proposals, new post-Brexit border checks, and a nearly 10% rise in Britain's minimum wage from March as additional burdens for shops.
The BRC's data, based on prices collected between March 1 and March 7, underscores the shifting dynamics in the UK retail landscape amid ongoing economic changes and regulatory shifts.
