Inflation in UK shops has fallen to a 17-month low as retailers fight to attract shoppers ahead of the crucial holiday period.
The British Retail Consortium said Tuesday that inflation fell 0.9 percentage points in November to 4.3%, the lowest level since June 2022. It’s the sixth-straight month that the trade association has recorded declines.
However, the lobby group said there was no guarantee that inflation would keep falling, with higher taxes and an increase in the minimum wage pushing up costs.
In the Autumn Statement last week, Chancellor of the Exchequer Jeremy Hunt froze business rates — a divisive property tax — but only for smaller businesses. Large bricks-and-mortar retailers will face an increase in line with inflation.
Retail sales fell unexpectedly last month, stoking fears that the Bank of England’s restrictive monetary policy is starting to weigh on economic activity.
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“With the recent slow-down in consumer spending, many non-food retailers will have been reliant on Black Friday to kick start sales to avoid discounting in December,” said Mike Watkins, head of retailer and business insight at NielsenIQ.
Lower domestic energy prices took the steam out of food inflation. It slowed to 7.8% in November, the lowest since July 2022.
The price of fresh produce increased at a slower rate than import-heavy room-temperature products, which were hit by a weaker pound.
--With assistance from Katie Linsell.
