Britain’s Shop Prices Rise For First Time Since May 2019
Britain’s shop prices increased for the first time in over two years during November because the global supply chain disruptions caused raw material costs to surge and forced businesses to pass on some of these increased costs to the consumers. According to the latest data released by the British Retail Consortium (BRC), shop prices were up by 0.3% YoY in November, marking the first rise seen since May 2019.
The overall increase registered came on the back of a 1.1% increase in food prices even as non-food prices recorded a 0.1% reduction. In addition, the group expects inflation to pick up even further in the coming months, which could mean higher shop prices for consumers.
According to Helen Dickinson, chief executive at BRC, “The impact of labour shortages, rising commodity prices and transportation costs have now very clearly taken their hold on consumer prices.”
In the month of October, Britain’s CPI had touched 4.2%, registering the fastest pace of increase on an annual basis in a decade. While the higher-than-expected inflation readings raised the likelihood of the BOE announcing a rate hike, markets were taken aback when the central bank chose to maintain rates steady at a record low of 0.1% in early November instead.
Meanwhile, 40% of households indicated feeling the pressure of higher prices driving up the cost of living and impacting their spending levels. Despite this, expectations of a rate hike soon have dipped as investors focus on the uncertainty is caused by the spread of the latest Omicron variant of Covid-19 around the world.
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