Grocery price inflation rises back to 2% in the UK

GROCERY inflation bounced back in the UK last month, according to research company Kantar.

Prices at supermarkets increased 2 per cent in the four weeks to Sep 29, its data showed on Tuesday (Oct 8), up from 1.7 per cent the previous month.

The fastest increases were in chilled drinks and chocolate confectionery, Kantar said, indicating that record high cocoa prices from poor harvests in West Africa are starting to feed through.

It comes as the Bank of England weighs up how quickly to reduce interest rates. The central bank cut rates by a quarter of a percentage point in August, the first easing since the pandemic.

Its Monetary Policy Committee held the level last month but has two more decisions to make this year in November and December. governor Andrew Bailey hinted last week at a “bit more aggressive” loosening of policy to come.

Tesco climbed to its highest market share since December 2017, the Kantar figures also showed. The UK’s largest supermarket now has 28 per cent of the market, up from 27.4 per cent a year ago.

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Ocado was the fastest growing grocer for the eighth month in a row, with sales rising 10 per cent in the 12 weeks to Sep 29. BLOOMBERG