Yahoo Finance Shop prices may rise again, say retailers as inflation threat looms
Shop prices have eased in November but the retail sector warns that shops might have to increase prices as the Bank of England warns that getting inflation down will be “hard work”.
Shop prices rose 4.3% in November, down from October’s 5.2% and the lowest inflation since last June, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index.
Food inflation overall slowed to 7.8% from October’s 8.8%, the seventh consecutive drop and its lowest rate since last July due to lower domestic energy prices cutting costs, particularly for dairy products, with fresh food inflation slowing to 6.7% from the previous month’s 8.3%.
The slowdown in price increases might, however, be temporary as BoE governor warned of a tough battle ahead to bring inflation back to 2%.
Read more: UK households ‘to lose £1,900’ after Jeremy Hunt’s autumn statement
In an interview with local news site Chronicle Live, Andrew Bailey said that the second half of the inflation battle, reducing prices from 4% at the end of the next quarter to 2% would be “hard work”.
He added: “I’m very conscious of the position of the less well-off but we do have to get it down to 2% and that’s why I have pushed back of late against assumptions that we’re talking about cutting interest rates or we will be cutting interest in anything like the foreseeable future because it’s too soon to have that discussion.”
Inflation has dropped in recent months, falling to 4.6% in the year to October.
BRC chief executive Helen Dickinson warned that business rate rises and National Living Wage increases would “likely” stall or even reverse falling inflation.
Dickinson said: “Retailers are committed to delivering an affordable Christmas for their customers.
Watch: UK inflation drops sharply as PM says pledge has been ‘delivered’
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