"A year and a half of non-food deflation looks set to come to an end, as inflationary pressures spread beyond food. DIY and gardening saw rising prices, while some back-to-school categories continued to see reductions as retailers offered promotions on electricals such as laptops ahead of the new academic year. Food inflation held steady after seven consecutive months of rises but increased labour and energy costs continue to push up input prices for many farmers, particularly of cattle, with dairy and beef prices remaining high."
"Households are finding shopping increasingly expensive. The impact on retailers and their supply chain of both global factors and higher national insurance and wage costs is playing out in prices for consumers. The new packaging tax, set to take effect in October, will put further upward pressure on inflation. While retailers continue to absorb higher costs as much as possible and deliver value to customers, any further tax rises in the upcoming Budget would keep shop prices higher for longer."
Shop price inflation increased to 1.4% year-on-year in the period 1–7 September, up from 0.9% in August and above the three-month average of 1.0%. Non-food inflation rose to -0.1% year-on-year from -0.8% in August, above its three-month average of -0.6%. Food inflation remained unchanged at 4.2% year-on-year, with Fresh Food at 4.1% and Ambient Food at 4.2% (Ambient below its three-month average of 4.5%). Rising labour and energy costs are increasing input prices for many farmers, especially cattle producers, keeping dairy and beef prices high. DIY and gardening categories saw price increases, while back-to-school promotions reduced some electronics prices. The new packaging tax in October will add upward pressure on shop inflation and further tax rises could keep prices higher for longer.
Read at London Business News | Londonlovesbusiness.com
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