🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

UK shop prices fall faster but retailers warn of risks in budget

Published 10/28/2024, 08:08 PM
Updated 10/28/2024, 08:15 PM
© Reuters. FILE PHOTO: A person carries an Amazon box past retail stores on Oxford Street in London, Britain, August 27, 2024. REUTERS/Hollie Adams/File Photo

LONDON (Reuters) - Prices in British shops fell at the fastest pace in more than three years this month but this week's budget announcement by finance minister Rachel Reeves could help spur a return of inflation, the British Retail Consortium said on Tuesday.

Annual shop price deflation dropped to 0.8% in the 12 months to October, the BRC said, its weakest since August 2021 and a bigger fall than September's 0.6% decline.

It was the eighth time in nine months that the pace of price growth has weakened.

Food prices rose by 1.9% but non-food deflation held at 2.1%. Clothing prices edged up for the first time since January as retailers unwound some of their heavy discounting.

"Households will welcome the continued easing of price inflation," BRC chief executive Helen Dickinson said.

"But this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation."

British finance minister Rachel Reeves is expected to include in her first budget on Wednesday an increase in social security contributions that businesses must pay for their staff, causing unease among some employers who are also nervous about labour market reforms to give more protections to workers.

© Reuters. FILE PHOTO: A person carries an Amazon box past retail stores on Oxford Street in London, Britain, August 27, 2024. REUTERS/Hollie Adams/File Photo

"Retail is already paying more than its fair share of taxes compared to other industries," Dickinson said and she called on Reeves to reduce the business rates tax paid by retailers.

Official figures showed consumer price inflation fell to 1.9% in September, well below a 41-year high of 11.1% it touched in October 2022. The Bank of England is expected to cut borrowing costs in November for only the second time in four years.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.