Prices in British store chains rose in August at the slowest pace in nearly a year, according to industry data that offers further relief for consumers hit by high inflation and for the Bank of England which is trying to quash it.
The British Retail Consortium said annual shop price inflation cooled to 6.9% in August, its lowest since October 2022, weakening from 7.6% in July.
Food price inflation fell to 11.5% from July’s 13.4%, driven by slower increases for meat, potatoes and some cooking oils. Non-food inflation held at 4.7%.
“These figures would have been lower still had the government not increased alcohol duties earlier this month,” BRC Chief Executive Helen Dickinson said.
Prices rose in month-on-month terms by 0.5% having fallen the first time in two years in July from June.
The BRC’s inflation measure captures prices of goods sold in store and is seen as an early signal for the broader official consumer price index which has fallen from a peak of over 11% last October to 6.8% in July.
However, inflation remains more than three times the BoE’s target and investors expect a 15th back-to-back increase in interest rates to 5.5% from 5.25% on Sept. 21 after the Monetary Policy Committee’s next scheduled meeting.