UK shop prices soar – data

Annual inflation in UK shops surged to its highest level in at least 18 years in May, despite a drop in the pace of food price growth, data from the British Retail Consortium (BRC) showed on Tuesday.

According to the trade body, prices at supermarkets and retail chains surged by 9% year-on-year in May, up from 8.8% in April. This was the largest increase since the BRC started tracking the indicator in 2005.

Meanwhile, food price inflation slightly decelerated, the BRC said, sliding to 15.4% from an all-time high of 15.7% reached last month.

“While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall. The slow in [food] inflation was largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples including butter, milk, fruit and fish,” BRC chief executive Helen Dickinson said, commenting on the findings.

Dickinson noted that “there is reason to believe that food inflation might be peaking,” but warned that it is crucial for the government not to hamper this trend “by piling more costs onto retailers and forcing up the cost of goods even further.”

“The biggest risk comes from policies such as the incoming border checks and reforms to packaging recycling fees,” she stated.

According to data published earlier this month by the Office for National Statistics (ONS), overall inflation in the UK in April dropped below 10% for the first time since August to 8.7% in annual terms. However, it remains the second-highest in Western Europe. The agency noted that underlying pressure on the economy remains strong, as so-called core inflation – an indicator that excludes volatile energy, food, alcohol, and tobacco prices – rose at its highest rate since 1992, by 6.8%.

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