UK shop price inflation at lowest since August 2022 -BRC

LONDON (Reuters) – Prices in British store chains rose at the slowest pace in more than a year in October, according to industry data that adds to signs that the country’s high inflation rate will resume its fall.

The British Retail Consortium said annual shop price inflation dropped to 5.2% from 6.2% in September, its weakest since August 2022.

Food price inflation fell for the sixth month in a row to 8.8% from 9.9%. Food prices rose slightly in month-on-month terms after the first such fall in over two years in September.

Non-food inflation eased to an annual 3.4% from 4.4%.

BRC Chief Executive Helen Dickinson said imported goods saw higher levels of inflation due to a weaker pound, still-high producer costs and emerging trade frictions, while prices for some domestically produced foods, such as fruit, were lower compared to last month.

She urged finance minister Jeremy Hunt to halt a big rise in business rates tax paid by retailers which could lead to shop price inflation increasing again. Hunt is due to make a budget update speech on Nov. 22.

Britain’s broader official consumer price index has fallen from a peak of over 11% in October last year to 6.7% in August and September.

The Bank of England paused its run of interest rate increases in September after 14 back-to-back hikes and it is expected to keep them unchanged again on Thursday. However, it has stressed it will probably have to keep rates high for a period to squeeze inflation pressures out of the economy.

(Writing by William Schomberg; editing by James Davey)