Shop price inflation slowed more than expected in February, offering households tentative relief from cost-of-living pressures as retailers stepped up discounting and global food prices eased.
New data from the British Retail Consortium (BRC) and NielsenIQ showed shop prices rose 1.1 per cent year-on-year in February, down from 1.5 per cent in January. The deceleration reflects intensified competition across both food and non-food sectors, with retailers cutting prices to stimulate demand amid weak consumer confidence.
The figures come ahead of the spring statement, when the Office for Budget Responsibility is due to update its outlook on growth and public finances. They add to recent signs that inflationary pressures are moderating, after official data showed UK consumer price inflation fell sharply to 3 per cent in January, moving closer to the Bank of England’s 2 per cent target.
Food prices remain elevated but are increasing at a slower pace. Annual food inflation eased to 3.5 per cent in February from 3.9 per cent the previous month. Fresh food inflation edged lower, while ambient food inflation, covering products such as coffee, pasta, canned goods and other cupboard staples, fell to 2.3 per cent, its lowest level in four years.
The BRC said lower global commodity costs were filtering through supply chains, helping to stabilise grocery prices. However, it emphasised that competitive dynamics were playing a crucial role, particularly in discretionary categories such as fashion, health and beauty.
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