–BRC: Price Pressures From Commodities, Import Inflation, VAT hike
LONDON (MNI) – UK shop price inflation stabilised in September
after easing in August, sticking at 2.7% year on year, the latest
results of the British Retail Consortium – Nielsen Shop Price Index
showed.
On a monthly basis, shop prices rose 0.2%, slightly above August’s
0.1%.
Non-food inflation rose 0.2% on the month and is 1.3% higher than
in September 2010. This compares to data from August, showing a 0.1%
rise on the month and a 1.4% increase year on year.
Food inflation rose 0.1% on the month and remained at August’s 5%
level on the year. Food inflation was flat in August. This compares to
the BOE’s 2% inflation target and the latest figures for August showing
inflation at 4.5%.
The survey showed that the main driver of overall inflation
remains food.
The BRC added that while pressures from world commodities, import
inflation and the VAT rise in January are persistent, they haven’t
worsened.
Stephen Robertson, director general of the BRC, said: “Fundamental
conditions are unlikely to change much this side of Christmas but next
month we’ll see what effect the supermarket price war – based on
straight price cuts rather than other forms of promotion – is having on
food inflation.”
Mike Watkins, Senior Manager of Retail Services at Nielsen, added
that even though food price inflation is up 5% from a year ago, “it
certainly looks as if the peak of 2011 will be a lot lower than the high
of over 8% that we saw at the start of the economic downturn three years
ago. And shoppers continue to get further savings from promotions and
price discounts at the checkout, which in turn is bringing down the cost
of the shopping trip.”
–London Bureau; tel: +442078627492; email: sanjukta.moorthy@ntkn.com
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