In November, the rate at which UK shop prices declined slowed, indicating potential imminent price increases for consumers, according to a report released by the British Retail Consortium on Tuesday.
The shop price index fell by 0.6% year-on-year in November, which is a marginal slow down in the decline compared to the 0.8% drop observed in October. Food price inflation slightly eased to 1.8% from 1.9% the previous month, while non-food prices saw a 1.8% reduction, improving from October's 2.1% decrease.
Helen Dickinson, the Chief Executive of the BRC, noted, "November marked the first occasion in 17 months where shop price inflation exceeded the previous month’s rate, even though it remains in negative figures. This might signify the close of the period of diminishing inflation given the considerable price pressures looming on the horizon."
Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, commented, "Consumers continue to exercise caution by prioritizing essential purchases and curbing discretionary spending. Consequently, the reduced inflation rate should boost consumer confidence ahead of Black Friday promotions." Watkins also mentioned that, compared to the same period last year, food retailers are offering more deals and discounts to drive sales in December.
Furthermore, official statistics revealed that consumer price inflation exceeded the 2% target again in October. Earlier this month, the Bank of England lowered its benchmark interest rate by 25 basis points to 4.75%. However, the bank indicated that future rate reductions would proceed gradually due to the inflationary pressures introduced by the Autumn Budget.
