Brits face further price hikes as businesses run out of wriggle room
The British Retail Consortium has warned that families are likely to face continued pressure as food inflation continues to rise.
This comes in response to the latest CPI inflation figures, which show headline inflation rising to 3.8% and food inflation rising to 4.9%. That means inflation is at its highest level for 18 months and still far above the Bank of England’s target of 2%.
CPI inflation is forecast to increase slightly further to peak at 4.0% in September. Inflation is expected to fall back thereafter towards the 2% target.
“Households are once again seeing the cost of their weekly shop climb, with food inflation now up by 1.9 percentage points in just four months. This surge has been a key driver behind headline inflation, alongside a rise in transport costs, piling fresh pressure on families already being forced to cut back,” said Kris Hamer (Director of Insight at the British Retail Consortium).
“The Bank of England has been clear that government policies, which have driven up the costs of employment, are fuelling price rises at the till, while poor harvests and global instability have also added further cost pressures.”
Hamer noted that there was some limited relief for consumers as clothing and footwear inflation remained subdued, while certain everyday food items such as olive oil, butter, and cheese did fall in price on the month.
“Retailers have been doing everything they can to prevent price rises, but the swathe of costs they now face has left them no room to manoeuvre. The recent administration of Claire’s Accessories is yet more evidence of the pressure the industry is currently facing.
“The Chancellor must avoid burdening the industry with even more taxes this autumn. Instead, she has an opportunity to encourage much-needed investment in our high streets by ensuring the planned reforms to business rates offer a significant reduction for retail properties, and leave no shop paying more.”
