The British Retail Consortium (BRC) has reported that intense rivalry between supermarkets has resulted in the first monthly decrease in food prices in over two years. The group said that September prices were 0.1% lower than those in the previous month. Margarine, fish, dairy goods, and vegetables – typically own-brand items – saw the largest declines, according to the BRC. Grocery inflation, which reports the annual degree by which food prices are increasing, remains elevated but is starting to abate. In the year to September, food prices climbed by 9.9%, compared to 11.5% in the previous month.
Overall shop price inflation, which includes non-food items, plunged to 6.2% last month, the smallest amount in a year. The BRC credited households, which have been aided by reduced prices on back-to-school items and school uniforms. A decline in inflation stats doesn’t necessarily signal a drop in prices, rather that they are rising at a lower pace. Helen Dickinson, the BRC’s CEO, noted that price increases will continue to slow during the rest of the year.
According to Mike Watkins of NielsenIQ, which compiles the BRC’s shop price index, although supermarkets had lowered prices in recent weeks, more than half of homes still felt a significant impact from the increasing cost of living. The BRC’s results correspond with recent official inflation statistics, which displayed that a decline in food prices resulted in an unexpected decrease in inflation in August. The Bank of England maintained its UK interest rates at its meeting last month because of the slowdown in inflation
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