UK shop prices fall less sharply in November, survey shows

Published On : 11/26/2024

LONDON (Reuters) –     Prices in British shops fell less sharply this month, according to a survey from the British Retail Consortium on Tuesday that suggested consumers could face renewed pressure on their spending power.

Annual shop price deflation of 0.6% in the 12 months to November followed a 0.8% drop in the 12 months to October, the BRC said.

Its measure of shop price inflation dropped between May 2023 and July this year after which it fell further into deflation, until now.

“With significant price pressures on the horizon, November’s figures may signal the end of falling inflation,” Helen Dickinson, BRC’s chief executive, said.

Official figures last week showed consumer price inflation rose to 2.3% in October, largely reflecting a surge in household energy prices.

The Bank of England this month cut interest rates to 4.75% from 5% but said it was likely to move only gradually with further cuts.

On Monday, BoE Deputy Governor Clare Lombardelli expressed concern about the risk of stronger price growth than forecast.

The BRC’s Dickinson said prices would increase as stores pass on higher staffing costs including in finance minister Rachel Reeves’ budget last month.

Reeves on Oct.30 announced a 25 billion-pound ($31.53 billion) rise in social security contributions by employers alongside a 6.7% uplift in the minimum wage.

The BRC survey showed food inflation fell to 1.8% from 1.9% in October. Prices of non-food items fell by 1.8%, a less severe drop than October’s 2.1% decrease.

A separate survey from British supermarket Asda on Monday said a drop in households’ disposable income and rising inflation could subdue Christmas spending.

($1 = 0.7930 pounds)

(Reporting by Suban Abdulla; Editing by William Schomberg)

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