UK shop price inflation has reached its lowest point in over three years, providing a welcome reprieve for consumers and raising hopes for potential interest rate cuts.
According to data from the British Retail Consortium (BRC) and NielsenIQ, annual shop prices contracted by 0.8 per cent over the year to October, deepening from September’s 0.6 per cent decline. This marks the lowest inflation rate since August 2021.
Month-on-month, shop prices rose by 0.1 per cent in October, following a 0.2 per cent decline in September. Food inflation dropped to 1.9 per cent annually, the lowest rate since November 2021 and down from 2.3 per cent the previous month. Non-food prices, meanwhile, continued to fall, showing a 2.1 per cent decline over the year.
The BRC’s shop price index, released ahead of the official inflation report, often provides an early indication of overall inflation trends. September’s official inflation estimate from the Office for National Statistics fell to 1.7 per cent from 2.2 per cent in August, signalling a potential undershoot of the Bank of England’s 2 per cent target. With stabilising price pressures, expectations are growing for a series of interest rate cuts by the Bank of England, with markets anticipating policy easing at upcoming November and December meetings.
Helen Dickinson, chief executive of the BRC, welcomed the continued downward trend in price inflation but noted it remains susceptible to external pressures. “Households will welcome the easing in price inflation, but this trajectory is vulnerable to geopolitical tensions, climate-related disruptions to food supplies, and increased regulatory costs,” she said. Dickinson also urged Chancellor Rachel Reeves to consider reforming business rates in the forthcoming budget to help lower operational costs for high-street retailers.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.
