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A slowdown in tea prices helped ease inflation in January
Shop prices rose at their slowest rate in more than 18 months in January, according to the latest report from the British Retail Consortium (BRC).
Inflation – the rate at which prices rise – reached near-record levels last year, leading to a cost-of-living crisis.
However, cuts and lower milk and tea prices brought shop price inflation down to 2.9%, from 4% in December.
In general, prices are still rising in stores but at a slower rate.
On average, food prices are still rising by more than 6% annually.
The BRC – which represents some of the UK’s biggest retailers – said shop price inflation in January was at its lowest level since May 2022.
Post-New Year’s cuts also helped slow the rate of rise in prices of non-food products, which fell to 1.3%, down from 3.1% the previous month.
However, the British Retail Consortium warned in its report that many households have not felt the benefit of lower inflation, adding that there are risks that price rises could accelerate again.
Helen Dickinson, chief executive of the British Retail Consortium, said progress in slowing price rises was likely to be “hindered” by other cost pressures, including the implementation of the increase in the National Living Wage and the rise in business rates in April.
“Rising geopolitical tensions will also increase uncertainty and costs in supply chains. With a general election later this year, we want to see political parties outline how they will help unlock investment across the country, rather than the current path, which is “It does very little.” “The opposite,” said Mrs. Dickinson.
Some analysts fear that inflation will remain high, following attacks on ships using a vital trade route through the Red Sea.
Many shipping companies stopped ships using this route after the attacks launched by the Houthi rebels in Yemen. Last week, the United States and the United Kingdom launched military strikes against the Houthis.
However, although tobacco and alcohol prices remain high, there is some hope that headline inflation will fall to near the government’s 2% target, as energy bills are expected to fall in 2024.
Some analysts said lower inflation would fuel hope that the Bank of England might cut its key interest rate, which is currently at a 15-year high.
The Bank of England has repeatedly raised interest rates in an attempt to tackle inflation, which has strained the finances of UK households over the past two years.