Brexit could flame inflation

Brexit could flame inflation
Lord Frost warned the “burdens” created by the Northern Ireland Protocol will “worsen, not improve over time

Meanwhile Price Promotions Drive Down Prices

Shop prices continued to fall last month as retailers ran more promotions in an effort to encourage cautious consumers to spend, according to the latest British Retail Consortium and Neilson figures.

Shop prices were down 1.6 per cent in August compared to a decrease of 1.3 per cent in July.

Non-Food prices slid 3.4 per cent compared to a fall of 2.9 per cent the previous month.

Food inflation eased from 1.5 per cent to 1.3 per cent. Driven by fresh food inflation slowing from 0.9 per cent to just 0.2 per cent amid increased availability of seasonal produce. Ambient food inflation accelerated to 2.8 per cent last month, up from 2.3 per cent in July.

BRC Chief Executive Helen Dickinson stated that consumers will welcome another month of falling prices in shops but warned that rises could be on the way.

Under threat

“These lower prices are already under threat from increased costs associated with implementing coronavirus safety measures and are certain to rise if the UK ends the transition period without a trade deal with the EU,” she said.

“The absence of a tariff-free deal will lead to higher prices for consumers as thin retail margins force retailers to raise prices in response to higher import costs. Furthermore, without a deal that reduces checks and red tape, the UK supply chain faces severe disruption, reducing the availability of goods and further raising prices for consumers.”


Meanwhile, Nielsen’s Head of Retailer & Business Insight Mike Watkins noted that supermarket sales got a boost as many families turned to stay-cations this summer.

“With millions of families choosing to holiday in the UK this summer, supermarket sales remain buoyant with sales of fresh foods showing an uptick, helped by hot weather earlier in the month and slowing inflation as seasonal produce becomes available. This has offset some of the increases in ambient food and drink. However, deflation continues in much of non-food with retailers still unsure about the levels of demand for next seasons’ ranges.”