UK shop inflation slows as retailers extend promotions, BRC says

UK SHOP prices grew at a slower pace in September, according to a survey, as retailers avoided passing on higher costs to consumers.

The British Retail Consortium said on Tuesday (Sep 29) that prices in UK shops rose 1.4 per cent over the last year, down from a rate of 1.5 per cent in August. The slight decline reflected widespread promotions and price cuts as shops tried to attract customers.

“Sales growth slowed after the hot summer,” said Mike Watkins from NIQ, a research firm that conducts the survey. The fourth quarter “is expected to bring tighter household budgeting so retailers will still need to absorb cost increases wherever possible,” he added.

Increased competition among retailers also weighed on food inflation, offsetting pressures from higher global energy prices and poor harvests across Europe. The BRC said food prices grew 2.5 per cent in September, a decline from last month’s 2.8 per cent

The report will provide some reassurance to Bank of England officials that the Iran price shock hasn’t spread more widely across the UK economy, so far. However, BOE policymakers — who’ve kept rates unchanged since the start of the war — are warning that rate increases become more likely the longer the conflict persists. BLOOMBERG