UK shop price inflation holds at 0.2% in July

UK shop price annual inflation remained unchanged at 0.2 per cent in July, matching its lowest rate since October 2021 and falling below the 3-month average of 0.3 per cent.

Non-food prices continued to experience deflation at -0.9 per cent, slightly improving from -1.0 per cent in June and aligning with the 3-month average.

Food inflation slowed to 2.3 per cent in July, down from 2.5 per cent in June and below the 3-month average of 2.7 per cent. Fresh food inflation eased to 1.4 per cent, from 1.5 per cent in June, while ambient food inflation decelerated to 3.6 per cent, down from 3.9 per cent in the previous month.

Helen Dickinson, Chief Executive of the British Retail Consortium, noted that declining global food commodity prices have contributed to lower food inflation, though future pressures might arise due to climate change and geopolitical tensions.

Mike Watkins from NielsenIQ highlighted that despite a lower inflation rate expected in the coming months, retailers should be cautious with price increases amid ongoing financial pressures on households and sluggish consumer confidence.

Attribution: The British Retail Consortium.