Yahoo Finance UK shop prices hit record high with inflation set to make Easter even worse
Shop prices hit a new high in March and are set to rise even further ahead of Easter in yet another blow to UK households struggling amid a cost of living crisis.
Shop prices are now 8.9% higher than they were a year ago, up from February’s 8.4% increase, according to the British Retail Consortium (BRC)-NielsenIQ index.
Food inflation accelerated to 15.0% in March, up from 14.5% in February. This the highest inflation rate in the food category on record.
Inflation on items other than food also reached a new record of 5.9%, up from 5.3% in February.
Despite the record high prices, the BRC has warned that shop price inflation has yet to peak.
Read more: UK braced for further price rises as inflation set to worsen, S&P warns
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high,” Helen Dickinson, BRC’s chief executive, said.
"Shop price inflation has yet to peak. As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March,” she added.
Last week the Office for National Statistics reported that UK inflation shot up unexpectedly from 10.1% in January to 10.4% in February as the vegetable shortages pushed food prices to their highest rate in more than 45 years.
“Fruit and vegetable prices also rose as poor harvests in Europe and North Africa worsened availability, and imports became more expensive due to the weakening pound. Some sweeter deals were available in non-food, as retailers offered discounts on home entertainment goods and electrical appliances,” Dickinson said.
Read more: Inflation rate in surprise jump to 10.4% amid record food costs
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.
“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.
“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”
Watch: Inflation jump deepens UK cost of living crisis
Download the Yahoo Finance app, available for Apple and Android.