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UK store price inflation slowed in June helped by a second consecutive monthly drop in food price growth, according to the latest industry data.
Figures published by the British Retail Consortium on Tuesday showed the cost of store items rose at an annualized rate of 8.4 percent this month, down from 9 percent in May and below the three-month average of 8.7 percent.
Helping mitigate was slowing food price growth – where inflation was particularly sharp – to 14.6 percent in June from 15.4 percent the previous month and down from a record high of 15.7 percent in April.
A sharp rise in food costs and soaring energy prices in the wake of Russia’s full-scale invasion of Ukraine last year were the main drivers of the cost-of-living crisis, with inflation still rising in the UK.
“Families across the country will welcome the easing of shop price inflation in June,” said Helen Dickinson, chief executive of the British Retail Confederation.
It said fresh food prices were the main driver of the slowdown as retailers cut the cost of many staples, including milk, cheese and eggs. The annual growth of fresh food prices in June was 15.7 percent, down sharply from 17.2 percent in the previous month.
The price of ambient food inflation — items that can be stored at room temperature — fell slightly to 13 percent, down from 13.1 percent in May.
“If global supply chain costs continue to fall, we may now be past the peak of (food) price increases,” said Mike Watkins, NielsenIQ’s head of retail and business insights, which helps compile the data.
Official inflation for food and non-alcoholic beverages fell to 18.4 percent in May from 19.1 percent in the previous month, another drop from a 45-year high of 19.2 percent in March. The BRC figures indicate that the slowdown will continue this month.
BRC data showed that retailers were discounting clothing and electrical goods, which helped non-food inflation ease 0.4 percentage point to 5.4 percent in June.
But prices are still high by historical standards and Watkins said he expects buying behavior for the rest of this year to “still likely shift towards basic needs as discretionary consumption is deprioritized or delayed.”
Data published last week showed that sales volumes of household goods were 7.6 percent lower than pre-pandemic levels in February 2020, as consumers cut back on purchases in response to higher prices.