The latest British Retail Consortium data reveals a significant drop in UK food inflation.
- Food inflation has decreased to 11.5% for this month, showing a marked improvement from July’s 13.4%.
- Shop price inflation has also significantly declined, marking the lowest increase since October 2022.
- Fresh and ambient food categories have experienced notable inflation reductions, benefiting consumers.
- Despite these improvements, wage growth continues to lag behind the rate of price increases.
The British Retail Consortium has provided new data indicating a positive shift in the food inflation landscape, with rates dropping to 11.5% this month. This demonstrates a substantial change from the previous month’s 13.4%, suggesting a promising trend for consumers and the economy alike.
Moreover, shop price inflation has reached its lowest point since October 2022, now standing at 6.9% for the year to August, a notable reduction from 8.4% in July. This decline can largely be attributed to decreases in food inflation, particularly involving key staples such as meat, potatoes, and certain cooking oils.
Fresh food inflation saw a significant decrease to 11.6%, down from 14.3% in July, while ambient food inflation declined by 1% to 11.3%. These reductions are indicative of substantial improvements within the food market, providing some relief to consumers facing rising living costs.
BRC chief executive Helen Dickinson remarked upon these improvements, stating that while these are positive developments, they come amidst challenges, such as the government’s increase in alcohol duties. Dickinson also highlighted the potential impact of geopolitical factors, including Russia’s actions affecting Ukrainian grain facilities and poor harvests across Europe, which could pose future risks to inflation.
Nevertheless, current wage growth is not keeping pace with these price reductions, with ONS data reflecting an average total pay increase of only 8.2% from April to June. This disparity underscores ongoing economic pressures despite the easing of food prices.
While UK food inflation shows signs of slowing, economic pressures remain due to income growth lagging behind inflation rates.
