By Suban Abdulla
LONDON (Reuters) – Inflation in major British store chains hit a new record in the 12 months to February, reflecting the rising cost burden for retailers and consumers, the British Retail Consortium (BRC) said on Wednesday.
Prices rose by the largest annual amount across all the main categories monitored by the BRC since records started in 2005.
Overall shop price inflation rose to 8.4% from 8.0% in January.
“Shop price inflation rose to another record high as retail prices across the board continued to react to the impact of soaring energy bills, higher running costs and tougher trading conditions brought about by the war in Ukraine,” BRC chief executive Helen Dickinson said.
Fresh food inflation jumped to 16.3% this month, up from the previous high of 15.7% in January. Other food item prices surged to 14.5% from 13.8% in the month before.
Dickinson said fresh food prices were hit by a weaker sterling, making produce imports from Europe more expensive.
The survey echoed other industry measures of price rises.
Data from market research firm Kantar on Tuesday showed grocery inflation rocketed to a record 17.1% in the four weeks to Feb. 19.
The BRC expects retail prices to remain high over the coming months even if the annual inflation rate cools further in the second half of this year.
Britain’s annual consumer price inflation – which includes services and other non-shop goods like energy – fell to 10.1% in January after hitting a 41-year high of 11.1% in October.
British households face a tighter squeeze on their disposable incomes this year in the face of higher borrowing costs and as the government cuts back support on household energy bills.
However recent signs point to an improvement in Britain’s economy. Businesses reported a surprise return to growth in a survey published last week and there were also signs of unexpected strength in public finances data.
A gauge of consumer confidence also showed shoppers turned more upbeat about their personal finances and economy.
(Reporting by Suban Abdulla, editing by Andy Bruce)
