The UK’s food inflation rate has hit the lowest point in almost a year.
- Food inflation fell to 11.5% in August, down from 13.4% in July.
- Shop price inflation saw a decline from 8.4% to 6.9%.
- Fresh food inflation significantly decreased to 11.6%.
- Economic factors continue to influence retail prices despite improvements.
The UK’s food inflation has reached its lowest point in almost a year. August figures show a drop to 11.5%, an improvement from July’s 13.4%, as recorded by the British Retail Consortium. This marks a significant easing in the accelerated price increases experienced over the previous months.
Shop price inflation, overall, has seen a welcome decrease to 6.9%, from a previous 8.4%, marking the slowest growth since October 2022. This decline reflects a broader stabilisation in consumer prices, bringing some relief to households.
Fresh foods have been notably impacted, with inflation falling sharply to 11.6% from 14.3% in July. Ambient food prices also showed improvement, decreasing by 1% to 11.3%, indicating a trend of moderated inflation across various categories.
Helen Dickinson, the BRC Chief Executive, remarked that this fall in inflation presents ‘better news for consumers’, driven particularly by lower prices in essential items such as meat, potatoes, and cooking oils. However, she cautioned that despite these reductions, the pace of price increases remains faster than wage growth, which recorded an 8.2% rise from April to June, according to the Office for National Statistics.
Several external factors continue to present challenges for the retail sector. While inflation trends downward, risks such as Russia’s actions impacting Ukraine’s grain facilities and poor harvests in Europe could threaten further progress. Additionally, the recent adjustments in alcohol duties, with tax levied according to a drink’s strength, might offset gains made in controlling inflation. Dickinson highlighted a potential £400 million increase in business rates next April as a looming threat that could compromise efforts to manage inflation unless government intervention occurs.
Future inflation control efforts face potential hurdles due to external economic factors.
