Price Rises In Shops At Lowest For Nearly A Year

Price rises in British shops have slowed to their lowest rate since October but they are still significant, new data shows.

Prices rose 6.9% in the year to August, down from 8.4% in July, the British Retail Consortium (BRC) said.

Meat, potatoes and some cooking oil prices have risen less sharply.

But with grain exports from Ukraine in jeopardy, a rapid slowdown in price rises is unlikely. Ukraine accounts for almost a third of global grain exports.

Up until last month, a deal between Russia and other countries allowed the safe passage of grain out of Ukraine, but Russia has now pulled out of that deal, known as the Black Sea Grain Initiative.

This, combined with India's decision to place export restrictions on rice, means there are now "dark clouds on the horizon", the BRC said.

The group expects overall food price inflation to continue to fall, but said prices could rise slightly on items like vegetable and sunflower oil as a result of the Black Sea Grain Initiative ending.

While the UK does not import large amounts of wheat directly from Ukraine, global wheat prices are expected to rise, which could lead to an increase in the price of bread, the BRC said.

Depending on the product, it could take months for any price changes at the start of the food chain to reach supermarket shelves, it added.

The retail trade association also blamed a rise in taxes on alcohol.

"These figures would have been lower still had the government not increased alcohol duties earlier this month," BRC chief executive Helen Dickinson said.

She said some ingredients in toiletries and cosmetics had become cheaper, which helped to ease price rises in these categories.

However, inflation for clothing and footwear increased as the summer sales came to a close.

Ms Dickinson added that there remained "supply chain risks for retailers to navigate".

Soaring food prices have been hitting households hard for more than a year.

The UK's overall inflation rate in July was 6.4%. However, food price inflation remains at 13.4%.

While that figure has dropped from a March high of 19.2%, Huw Pill, chief economist at the Bank of England, said earlier this month that high inflation rates had been "more long lasting than expected".

He added that there had been "some hiccups" with bringing it down - notably the war in Ukraine and the export of grain out of the Black Sea.

Global prices for certain commodities were starting to fall, Mr Pill said.

However, he claimed that some firms, "in the face of uncertainty", had locked in higher prices when the war first started, which had led to higher prices on the shelves.

Separate research by Which? suggests that consumer trust in the grocery sector has fallen to its lowest level since the horsemeat scandal of 2013.

One man in his 30s told the consumer group: "When retailers declare that they have a great profit it shows that they aren't doing what they claim of 'helping the nation during a cost of living crisis'."

Katie Alpin, head of strategic insight at Which?, described the cost of the weekly shop as being "on par with energy bills as the biggest worry for millions of households".

Andrew Opie, the BRC's director of food and sustainability, said it was "certainly not true" that consumers do not feel like they're getting a good deal at the shops, adding that retailers were on the side of consumers when it comes to food prices.