UK non-food inflation hits new high
The UK’s shop price annual inflation accelerated to 8.4% in February, up from 8% in January, above the 7.8% three-month average and a new high.
While surging food costs were the biggest issue and non-food inflation has lagged the overall figure, it’s still accelerating and was 5.3% in February, up from 5.1% in January. Again, that was higher than the quarterly average of 4.9%.
That’s according to the latest BRC-NielsenIQ Shop Price Index. It comes at a time when there had been hopes that inflation was beginning to ease. However, as far as non-food products are concerned, the increase is perhaps no surprise given the arrival of new-season goods last month. Many retailers had already said that they were raising prices on such goods.
Helen Dickinson, Chief Executive of the British Retail Consortium, said the record high was reached as retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine.
And she added that “while we expect to see the annual inflation rate reduce in the second half of this year, retail prices will remain high over the coming months. Government must avoid any additional costs on business as this will jeopardise retailers’ ability to best support their customers and keep prices low throughout this cost-of-living crisis”’
Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, also said that more than half (56%) of UK consumers feel they’re in a worse financial position compared to a year ago so inflation still being “stubbornly high” means many households are trimming back on non-essential spending.
“As volume sales are down on last year, some retailers are having to work even harder to encourage customer spend, including additional price cuts or promotional activity. This likely to continue until consumer confidence starts to improve,” he added.
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