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Prices for non-food items in UK supermarkets have fallen year-on-year for the first time since 2021, putting overall in-store inflation below 1 per cent, according to industry data.
The British Retail Consortium said on Tuesday that annual retail price inflation slowed to 0.8 percent this month from 1.3 percent in March, the lowest rate since December 2021.
Non-food items fell into deflation in April, falling 0.6 percent, which the trade association attributed in part to special promotions by retailers. The reading was below a 0.2 percent increase in March, the lowest level since October 2021 and the first negative reading since December 2021.
The BRC retail price index offers an early indication of price pressures ahead of official data release on May 22. Helen Dickinson, BRC chief executive, said the latest figures suggested prices after costs were “showing signs of normalising, providing relief to households”. the life crisis.
“In both food and non-food sectors, in-store inflation rates have fallen to more bearable levels,” she added, noting that prices have fallen, particularly in clothing and footwear.
In March, the official measure of consumer price inflation – which, unlike the BRC index, includes services, energy and travel – fell to its lowest level in two and a half years at 3.2 percent.
Economists polled by Reuters forecast that energy prices would fall below the Bank of England’s 2 percent target in the second quarter of this year after regulator Ofgem announced a cut in the energy price cap in February.
The BoE is struggling with internal disagreements over when to cut interest rates soon from 5.25 percent and faces growing pressure from conservatives to cut rates before the next meeting of the monetary policy committee in May.
Chancellor Jeremy Hunt has repeatedly threatened cuts as he seeks a feel-good economy ahead of a general election expected this year.
The BRC figures suggest that the decline in inflation continued in April beyond the energy sector, including in food, whose prices soared after Russia’s invasion of Ukraine in 2022.
Economists argue that lower inflation combined with still-strong wage growth should support demand and help a recovery in spending.
The BRC said food inflation slowed to 3.4 percent in April from 3.7 percent in March, the lowest since March 2022.
This was the result of slower price growth for fresh food – to 2.4 percent in April and the lowest level since November 2021 – as well as for unrefrigerated food that can be stored at room temperature. Food inflation fell to a nearly two-year low of 4.9 percent in April, according to the trade association.
Mike Watkins, head of retail and business insight at research firm NielsenIQ, which helped compile the data, said it was “good news for shoppers that their grocery store costs are beginning to stabilize and that prices for many non- Stabilize food goods “now cheaper than a year ago”.
“To help shoppers manage their household budgets, retailers continue to advertise, driving further savings and we expect this will continue to help drive overall demand,” he added.