- Retail prices rose just 0.2% in the year to June
- Food prices slowed for the 14th consecutive month and grew by 2.5%
Prices in UK shops rose at their slowest pace in almost three years last month, new industry data shows.
Prices at the retail sector rose just 0.2 percent in the year to June, compared with 0.6 percent in May, according to the British Retail Consortium-NielsenIQ store price index.
The slower growth was partly due to retailers offering cheaper prices on televisions ahead of the European Championship soccer tournament, as well as on butter and coffee.
Improvement: Prices across the retail sector rose just 0.2 percent in the year to June, compared with 0.6 percent in May, according to the BRC/NielsenIQ in-store price inflation index
This was the smallest growth since October 2021 and was below what many economists had forecast.
Food prices slowed for the 14th consecutive month and by the lowest percentage since December 2021, growing by 2.5 percent compared to 3.2 percent in May.
BRC chief executive Helen Dickinson said inflation had been eased by investments retailers had made to improve supply chains and falling prices for items such as butter and coffee.
At the same time, non-food prices fell 1 percent, faster than the 0.8 percent drop seen in May, as businesses offered discounts to try to boost trade.
Dickinson watched as companies cut prices on items like televisions ahead of the European Football Championship.
He added: ‘Whoever wins Thursday’s election will benefit from retailers’ work to cut costs and prices, easing the cost of living for millions of households.
‘The past few years should serve as a warning: When business costs rise significantly, consumer prices are forced to rise as well.’
Inflation began to rise in 2022 and peaked at 11.1 percent in October of that year, when Russia’s large-scale invasion of Ukraine and the easing of Covid-19 restrictions pushed up energy prices.
Whoever wins Thursday’s election will benefit from retailers’ efforts to cut costs and prices.
It has since fallen to 2 percent following 14 successive increases in the Bank of England’s base rate between December 2021 and the summer of 2023.
Victoria Scholar, chief investment officer at Interactive Investor, said the latest retail price figures “are a win” for both the BoE and Rishi Sunak’s government and strengthen the chances of the former cutting interest rates in August.
He added: “This could boost markets as well as consumer and business confidence.
“It could also potentially increase demand for loans and provide some reassurance that the inflationary crisis of recent years has officially passed a critical point.”
However, they are unlikely to significantly improve Sunak’s prospects of securing an election victory, with opinion polls widely predicting the Conservatives will lose in a landslide on Thursday.