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UK shop price decline quickens in October: BRC
[LONDON] British shops matched a record decline in the price cuts in October and food prices looked at risk of falling into deflation, a survey showed on Wednesday.
The British Retail Consortium said October retail prices were 1.9 per cent lower than a year ago, matching July's record decline and weaker than a 1.8 per cent fall in September.
Prices for food products edged up just 0.1 per cent, the smallest rise since the survey began almost eight years ago, compared with a 0.3 per cent increase in September. There was deep and widespread discounting across grocery stores.
Mike Watkins, head of retailer and business insight at survey compiler Nielsen, said shoppers had been helped by a fall in global food prices over the last six months. "With sales volumes at an historic low point for food retailers, there is now a risk of food deflation on the horizon." Britain's big supermarkets have fought an escalating price war, spurred by discounters like Aldi and Lidl which have taken a growing market share from traditional rival grocers.
Overall, consumer price inflation ran at 1.2 per cent in September, well below the Bank of England's 2 per cent target. Wages are growing even more slowly - something the BoE has cited as a reason to keep interest rates on hold.
The BRC survey is designed to reflect price changes in shops in 500 of the most commonly bought high street products.