The latest figures reveal a significant decrease in UK food inflation, offering consumers a sense of relief.
- Food inflation has fallen to its lowest since the previous year, with the rate now at 11.5%, down from 13.4% in July.
- Shop price inflation has also declined to 6.9% in the year to August, offering encouraging news for consumers.
- Fresh food inflation has decreased notably from 14.3% in July to 11.6%, while ambient food inflation now stands at 11.3%.
- Despite the reductions, inflation rates are still outpacing wage growth, with concerns about future supply chain risks.
The latest data from the British Retail Consortium indicates that UK food inflation has fallen to 11.5% this month, a decrease from 13.4% in July. This is the lowest rate recorded in almost a year, bringing a sense of relief to consumers facing rising costs in recent months.
In addition to food inflation, shop price inflation also saw a decline, dropping to 6.9% compared to 8.4% in July. These figures reflect the lowest levels since October 2022, suggesting a positive trend in pricing developments.
The decrease is attributed to lower inflation rates for several products, including meat, potatoes, and some cooking oils. Helen Dickinson, Chief Executive of the British Retail Consortium, stated that this trend is “better news for consumers.”
However, it is important to note that the current inflation rate still exceeds the growth in wages, which rose by only 8.2% from April to June, according to the Office for National Statistics. This indicates that the cost of living pressure persists despite reduced inflation rates.
Moreover, Dickinson highlighted significant challenges impacting future inflation trends, such as the increase in alcohol duties set by the government, which can affect pricing. Additionally, supply chain risks arise from geopolitical tensions, such as Russia’s withdrawal from the Black Sea Grain Initiative, and adverse harvest conditions across Europe.
A potential £400 million hike in business rates could further exacerbate inflationary pressures unless addressed by the Chancellor. These factors underscore the continuing complexity of managing inflation in the current economic environment.
Inflation may continue its downward trend, but external pressures necessitate ongoing vigilance.
