The retail prices in Britain climbed by 0.4 per cent in September which was same as the year-on-year rise recorded for shop prices in August, the British Retail Consortium (BRC) said.
The trade association said food continues to be the sole cause of inflationary pressure with food prices climbing by 2.7 per cent in 12 months to September compared to 2.1 per cent rise recorded in August.
The BRC said increased costs had started to hit retail prices, particularly within the market for fresh produce. Last month the organisation warned that a slowdown in food price inflation was likely to be reversed once the full impact of the summer’s flooding in the UK was felt.
But while food prices are now rising, non-food prices were 0.7 per cent lower in September. The drop is larger than the 0.4 per cent fall in non-food prices recorded for August.
The BRC attributed the fall to “intense” price competition and promotional activity within the non-food sector.
Meanwhile the trade association stressed that food price inflation still remained relatively low and urged the Bank of England to cut interest rates in order to help ease pressure on retailers facing higher costs.
“A large proportion of these cost pressures are being absorbed by retailers, helping to keep prices down,” said BRC director general Kevin Hawkins.
“However, we have yet to see the full effects of high interest rates on consumer spending and a rate cut now by the Bank of England would provide some much needed relief to consumers and retailers alike,” he said.
The BRC insists that with consumer price inflation remaining below the Bank’s two per cent target and shopper confidence waning in the wake of rising utility bills and slow pay growth, an interest rate cut is “overdue”.