THE price of food at the shop till is falling at its fastest rate in a year, new figures show.
And while is represents encouraging news for the least well off, retail bosses warn that “we must not be complacent” because it's not inevitable inflation will continue to decline.
Overall shop price annual inflation decelerated to 6.9 per cent in August, according to the latest British Retail Consortium/NielsenIQ shop price index.
That is down from 7.6 per cent in July and below the three-month average rate of 8 per cent. Indeed the rate is at its lowest since last October.
Non-food inflation remained unchanged at 4.7 per cent in August, again below the three-month average rate of 5.1 per cent.
And food inflation fell to 11.5 per cent from 13.4 per cent in July.
This is below the three-month average rate of 13.6 per cent, is the fourth consecutive drop, and puts food inflation is at its lowest since September last year.
NI Retail Consortium director Neil Johnston said: “The overall fall in shop price inflation is excellent news.
“Most welcome is the fact that food inflation has come down by almost 2 per cent since this time last year, because food prices impact most heavily on the least well off.
“We must not be complacent, as is not inevitable that inflation will continue to decline - and local decision-making would help.”
He added: “What we need to see now is leadership – including from politicians at Stormont and on our local councils - to keep business costs down and to help retailers bear down on inflation, ideally with a freeze to business rates next spring.
“The leaders of the main political parties ought to be writing to the Secretary of State Chris Heaton-Harris saying that, regardless of whether an Executive is formed by the end of the year, they would support another freeze in the regional rate for businesses.
“Local councillors too should be working to see how they can freeze their part of the business rate.
“Last year, while many councils continued to talk about regenerating their towns and local economies, they actually increased their part of the business rates by over seven per cent.
“Clearly, this simply puts added pressure on businesses and makes it harder to keep down prices,” Mr Johnston said.
The index showed that fresh food inflation slowed to 11.6 per cent and ambient food inflation dropped 11.3 per cent in August
BRC chief executive Helen Dickinson said: “The inflation dip was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils.
“And the figures would have been lower still had the government not increased alcohol duties earlier this month.”
She added: “While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.
“Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.
“A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”
