Fresh food prices help retail inflation to slow in August, new figures suggest

Price rises in British shops have slowed to their lowest rate since October last year, but keep going up significantly, new data has shown.

The British Retail Consortium (BRC) reported on Tuesday that prices rose 6.9% in the year to August, down from 8.4% in July.

The BRC showed that the main reason that retail inflation dropped was because fresh food prices rose less rapidly.

Fresh food inflation flowed to 11.6% in August, down from 14.3% in July.

Overall food inflation slowed from 13.4% to 11.5%. Inflation for non-food items was unchanged at 4.7%, the BRC said.

“This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils.

“These figures would have been lower still had the Government not increased alcohol duties earlier this month.”

She said that key components of toiletries and cosmetics had become cheaper, which helped ease price rises in these categories.

But inflation for clothing and footwear increased as the summer sales came to a close.

“While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.

“Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.

“A potential £400 million hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”