UK store costs fall in June as price of residing disaster eases

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UK store costs fell between Might and June and had been little modified from final yr, in accordance with sector knowledge that implies the subsequent authorities will profit from a pointy easing in the price of residing disaster.

Costs in shops and supermarkets fell 0.2 per cent month on month in June, with each meals and non-food objects registering a contraction, the British Retail Consortium commerce physique stated on Tuesday.

Annual inflation, the change in costs in contrast with the identical month in 2023, dropped to solely 0.2 per cent final month, down from 0.6 per cent in Might and the bottom since October 2021.

BRC chief government Helen Dickinson stated: “Whoever wins Thursday’s election will profit from the work of shops to chop their prices and costs, easing the price of residing for tens of millions of households.”

She stated meals inflation was now decrease than at any time since 2021, helped by falling costs for necessities comparable to butter and low, and that non-food costs had fallen from this time final yr as retailers sought to spice up gross sales by means of discounting.

“This was notably true for TVs with nice offers to capitalise on the Euros fever,” stated Dickinson.

Households have struggled with the price of residing disaster for a lot of the previous three years, with store worth inflation rising to an all-time excessive of 9 per cent in Might 2023 within the wake of Russia’s full-scale invasion of Ukraine.

Excessive residing prices have posed a problem for Prime Minister Rishi Sunak as he seeks to influence voters to again him on this week’s election. Labour has a roughly 20 level lead over the governing Conservatives in opinion polls.

Official shopper worth inflation — which not like the BRC index consists of providers, vitality and journey — dropped to 2 per cent final month, the primary time it has been on the Financial institution of England’s goal since July 2021.

The most recent BRC knowledge suggests underlying worth pressures continued to ease in June, serving to family earnings along with the quick tempo of wage progress. More healthy family funds bode effectively for financial progress.

The BRC discovered that non-food costs had been in deflation, falling by an annual price of 1 per cent in June, quicker than the 0.8 per cent contraction in Might.

Meals inflation declined additional to 2.5 per cent in June from 3.2 per cent in Might, effectively under its peak of 15.7 per cent in April final yr.

Annual worth progress in ambient meals, objects that may be saved at room temperature, remained larger however declined sharply to three.9 per cent from 4.8 per cent within the earlier month.

Mike Watkins, head of retailer and enterprise perception at analysis firm NielsenIQ, which helped compile the information, stated: “Store worth inflation remains to be slowing and this will likely be of assist to consumers as they plan their family budgets for important items and providers.”