New figures show UK shop price inflation has reached a record high amid warnings that consumers are unlikely to see prices drop again for months.
According to the British Retail Consortium-NielsenIQ Shop Price Index, prices in shops are now 8.4 per cent higher than they were a year ago, up from an 8 per cent increase in January and well above the three-month average of 7.8 per cent.
Food inflation rose from 13.8 per cent in January, accelerating to a record 14.5 per cent in February, while fresh food prices are also now a record 16.3 per cent higher than a year ago, up from 15.7 per cent in January.
A weaker pound resulted in imports of fresh food from Europe, especially vegetables, rising in price.
Inflation on products other than food hit a high of 5.3 per cent, up from 5.1 per cent last month and above the three-month average of 4.9 per cent, with gardening tools and pet food particularly affected by cost pressures.
“Shop price inflation rose to another record high as retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine,” BRC chief executive Helen Dickinson said.
“While we expect to see the annual inflation rate reduce in the second half of this year, retail prices will remain high over the coming months.”
Inflation around the world — in pictures
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People queue to buy wheat flour at government-controlled prices in Islamabad. Pakistan's economy has been hit hard by a political crisis, as well as devastating floods and the global energy crisis, with the rupee plummeting and inflation at decades-high levels. AFP -
A market in Rio de Janeiro. Brazil's inflation ended 2022 with a sharp slowdown from double-digit peaks seen throughout the year. Reuters -
A market in Istanbul. Turkey's inflation at the end of 2022 stood at 64. 27 per cent, the country's Statistical Institute said, while the independent group of inflation researchers ENAG calculated it at 137. 55 per cent. EPA -
A Walmart in New Jersey. According to a poll, US Republicans and Democrats have distinct views of what’s most important for the government to address amid high inflation. More Republicans name gas and food prices, energy and immigration, while Democrats focus on health care, climate change and poverty. AP -
A used car sales lot in California. US Federal Reserve officials have indicated it’s possibly too early to declare victory over inflation. AFP -
A person walks by a sign showing interest rates at a bank in New York. EPA -
A woman walks with purchases past a store in Berlin. In December, consumer price growth across the Euro zone slowed to 9.2 per cent from 10.1 per cent a month earlier, Eurostat data showed last week. AP -
Workers sit in front of a banner reading "Stop the Inflation Monster" at the Burchardkai Container Terminal as they go on strike for higher wages at the harbour in Hamburg, Germany. Reuters -
Price tags at a market in Nice, France. Reuters -
Commuters cross Waterloo Bridge in London. The British Retail Consortium said spending in store chains rose by 6.9 per cent in annual terms in December, but this was a long way off consumer price inflation, which hit 10.7 per cent in November. Reuters -
Jobseekers in Johannesburg. South Africa’s governing party wants the central bank’s mandate broadened to shore up the economy and promote employment in addition to its existing task of tackling inflation. Reuters -
Social grant recipients stand in a queue outside a post office, as joblessness takes its toll in Meadowlands, South Africa. Reuters
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With more than half of UK consumers (56 per cent) feeling they are in a worse financial position compared to a year ago and inflation still stubbornly high, many households are trimming back on non-essential spending.
“And as volume sales are down on last year, some retailers are having to work even harder to encourage customer spend, including additional price cuts or promotional activity. This is likely to continue until consumer confidence starts to improve.”
