UK shop price inflation grew last month at its fastest pace since October 2008, according to the British Retail Consortium – with food prices worst affected.
If you’ve seen the bill for your weekly shop steadily going up, it’s not because you’ve changed your spending habits. Inflation is still increasing, raising the prices of food and everyday essentials – and wages aren’t keeping pace.
According to the British Retail Consortium (BRC), food-price inflation reached 5.7% per annum in June – up from 4.9% in May and the highest figure since May 2009. Meanwhile, prices for non-food items raced to a three-month high of 1.3%.
Retail prices rose 2.9% compared to the same period last year, and the worrying trend is that they are accelerating. After having risen 0.1% in May, price inflation for retail goods grew 0.5% in June, a marked increase over the previous month.
According to BRC Director General Stephen Robertson, there is nothing retailers can do to curb inflation. He said, “Inflation is being driven by surging world commodity prices, the effect of the weak pound on import costs and higher value-added tax – all beyond retailers’ control.”
The current trend isn’t likely to relent, either. Economists are forecasting that the Bank of England will keep the interest rate at its historic low when it is reviewed tomorrow as some believe Britain’s economic recovery is still on shaky ground.
Moneyhighstreet comments: “Inflation puts a real squeeze on household budgets because it affects everyday essentials. Consider what other expenses you can save on to add to your shopping budget.
“For example, online price comparison sites can help you find better deals on utilities and insurance. And checking that you’re getting the best rates on your current account, loan or credit card can also help you save.
“When times are tight, it is also important to budget carefully, so you don’t unintentionally overspend. A prepaid credit card can help you do with without taking you into debt.”