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UK shop prices rise at highest rate since 2011

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·Finance Reporter, Yahoo Finance UK
·2-min read
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A customer shops for food items inside a Tesco supermarket store in east London on January 10, 2022. - UK annual inflation rocketed last November to 5.1 percent, more than double the Bank of England's 2.0-percent target -- price rises for fuel, clothing, food, second-hand cars and increased tobacco duty all helped drive up inflation. (Photo by Daniel LEAL / AFP) (Photo by DANIEL LEAL/AFP via Getty Images)
The rise was led by food prices, with fresh food inflation up 3.3%. Photo: Daniel Leal/AFP via Getty

Shop prices climbed at their fastest rate in over a decade to reach 1.8% in February, according to new retail industry figures.

Shop price annual inflation accelerated to 1.8% in February, the highest rate since November 2011 and up from 1.5% in the previous month, according to figures from the British Retail Consortium.

The rise was led by food prices, particularly fresh food inflation which accelerated in February to 3.3%, up from 2.9% in January.

Read more: Cost of groceries reach new highs as Ukraine war set to hike prices even further

“Retail prices rose in February at their fastest rate in over a decade. Food inflation remained the key driver behind higher prices, particularly for fresh food which has been impacted by poor harvests, both in the UK and globally,” BRC chief executive Helen Dickinson said.

“There is little sign of change, with the Bank of England predicting price rises to continue until at least the Spring.

“Price rises will be unwelcome news for households who already face falling disposable income because of the rise in national insurance and energy price caps.”

Non-food inflation accelerated to 1.3% in February, up from 0.9% in January. This marks the highest rate of inflation since September 2011.

Read more: Toilet rolls instead of sausage rolls? The worst supermarkets for substitutions

“Inflation has increased since the start of the year and the underlying trend in shop prices will be upwards over the next few months,” Mike Watkins, head of retailer and business insight at NielsenIQ, said.

With falling disposable income for most households, retailers will need to keep encouraging customers to spend by offering choice and value and for some, discounts as well as added benefits for loyal shoppers.”

The shop price index is based on a basket of 500 essential goods: 250 food and 250 non-food.

Watch: How does inflation affect interest rates?

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