UK shop price inflation races to more than 10-year high in February

UK shop price growth surged to a more than 10-year high in February, figures on Wednesday showed.

According to the latest British Retail Consortium-NielsenIQ tracker, yearly UK shop price inflation accelerated to 1.8% in February, from 1.5% in January.

February's figure was the hottest since November 2011, the BRC said.

‘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. 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,’ BRC Chief Executive Helen Dickinson commented.

On a monthly basis, UK shop prices increased 0.5% in February, following a 0.1% hike in January.

Annual non-food inflation quickened to 1.3% in February, from 0.9% in January, the highest rate since September 2011.

Food inflation was unmoved at 2.7% in February, while fresh food inflation alone accelerated to 3.3% from 2.9% in January.

Dickinson added: ‘Price rises will be unwelcome news for households who already face falling disposable income because of the rise in national insurance and energy price caps. Retailers continue to face cost pressures from higher shipping rates, with crude oil prices having almost doubled over the last year. Other pressures include labour shortages, commodity price increases, and rising energy prices. 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. Unfortunately, there are limits to the costs that retailers can absorb.’

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