UK retail prices highest in a decade

Retail price annual inflation accelerated from 1.5 per cent in January to 1.8 per cent last month, according to research from the British Retail Consortium (BRC).

The figures mark the highest rate of inflation since November 2011.

Non-food inflation was up from 0.9 per cent in the first month of the year to 1.3 per cent in February – also representing the highest inflation rate in roughly 10 years.

Food inflation was unchanged at 2.7 per cent last month – the highest inflation rate since September 2013.

“Retail prices rose in February at their fastest rate in over a decade. Food inflation remained the key driver behind higher prices, particularly for fresh food which has been impacted by poor harvests, both in the UK and globally,” said Helen Dickinson OBE, chief executive of the British Retail Consortium. “Meanwhile, the increase from last month is a result of rising prices for non-food products, particularly health, beauty and furniture.

"There is little sign of change, with the Bank of England predicting price rises to continue until at least the Spring.”

The chief exec added that retailers are continuing to face cost pressures from higher shipping rates, with crude oil prices having almost doubled over the past year. She also cited labour shortages, commodity price increases, and rising energy prices as a cause for higher rates.

"Retailers are going to great lengths to mitigate against these price rises and support their customers, for example, many supermarkets have expanded their value ranges for food," concluded Dickinson. "Unfortunately, there are limits to the costs that retailers can absorb.”

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