Food prices still rising faster than wages although overall rate of retail inflation falls

Business

Food prices are still rising faster than wages, new data has shown.

The British Retail Consortium (BRC) reported overall food inflation rose 11.6% in August, down from 14.3% in July.

But annual growth in average total pay only grew by 8.2% from April to June, according to the latest data available from the Office for National Statistics (ONS).

Fresh food inflation fell to 11.6% in August, down from 14.3% in July.

Inflation for ambient foods – items stored at room temperature – fell from 12.3% in July to 11.3% in August.

Meanwhile the BRC said price rises in shops have slowed to their lowest rates in October last year but keep going up significantly.

Prices rose 6.9% in the year to August, down from 8.4% in July.

While retail inflation has dropped it does not mean items are getting cheaper, just that prices increased more slowly between September 2022 and August 2023 than they did between August 2022 and July 2023.

The BRC showed the main reason retail inflation dropped was because fresh food prices rose less rapidly.

Inflation for non-food items was unchanged at 4.7%, the BRC said.

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‘Better news for consumers’

“Better news for consumers as shop price inflation in August eased to its lowest level since October 2022,” the consortium’s chief executive Helen Dickinson said.

“This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils.

“These figures would have been lower still had the government not increased alcohol duties earlier this month.”

She said key components of toiletries and cosmetics had become cheaper which helped ease price rises in these categories.

Inflation for clothing and footwear increases

But inflation for clothing and footwear increased as the summer sales came to a close.

“While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate,” Ms Dickinson added.

“Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.

“A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the chancellor intervenes.”

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