By Angela Green: Food prices lead food inflation downward in shops.
A slowdown in food prices has led the way in inflation reducing across UK shops, falling to its lowest since May 2022, seeing benefits for households.
New data from the British Retail Consortium and NielsenIQ show annual shop price annual inflation easing to 2.9% in January. That figure is down from December’s 4.3%, inflation of 2.9% sees prices still rising, but at a slower rate.
Food inflation specifically lowered to 6.1% in January, down from 6.7% in December, helped by a fall in the price of tea and milk. Alcohol remained more expensive than a year ago due to increased duties.
Fresh food inflation dropped to 4.9%, down from 5.4% in December, while non-food inflation eased to just 1.3% in January, down from 3.1% in December.
With the Bank of England due to set UK interest rates at noon on Thursday, these new inflation indicators should ease pressure on the decision makers.
Also, later this week, government will introduce new regulations and rules for EU businesses exporting animal and plant products to the UK. The initial phase of these rules comes into effect on the 1st of February, with full physical requirements being enforced from the 1st of April. These changes will add paperwork and cost to food imports further fuelling food price inflation.
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