-UK Aug BRC Shop Price Index 1.1% y/y vs 1.0% Jul
LONDON (MNI) – Food price inflation held steady in August, matching
July’s two year low, and fresh food price inflation dropped to its
lowest level since July 2010.
The British Retail Consortium’s August Shop Price Index showed
overall high street inflation nudged higher, with the SPI up 0.2% on the
month and up 1.1% on the year but the feared rise in food prices is not
yet coming through.
Food prices were up 3.1%, unchanged from July’s rate. which was
the lowest level in the BRC series for two years. Back in August
last year food price inflation was running at 5.0% and peaked at 5.4% in
March this year, but has since dropped sharply.
Fresh food price inflation dropped to 2.5% on the year from July’s
2.8%. This decline was offset by a rise in ambient food price inflation
to 4.0% in August from 3.6% in July. Ambient food is food altered to
lengthen shelf-life.
The drought in the US and exceptionally wet weather domestically
have raised speculation that food prices could spike, but the BRC said
fresh fruit and vegetables had put downward pressure on food prices in
August.
Commenting on the data, Stephen Robertson, British Retail
Consortium Director General, said “For all the talk of food prices
erupting, August’s food inflation was no higher than in the previous
month’s two year low.”
Robertson warned, however, that pipeline food inflation pressures
were mounting, with bread and pasta price rises accelerating due to the
poor harvests, and he saw “food inflation bottoming out.”
In its August Inflation Report the Bank of England downplayed the
likely impact of the US drought on UK food prices.
The BOE noted agricultural and livestock commodity prices had risen
but added that “the effect on CPI inflation is likely to be modest and
it will take time for international food price pressures to feed through
the supply chain into UK food prices.”
-London newsroom 0044 207 862 7491; email:drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$]
