Inflation figures for the first week of January this year showed rises which many have suggested might represent their peak.
However, the British Retail Consortium (BRC) has warned there may still be more increases to come in a post from its chief executive today.
Between the 1-6 January, shop price inflation increased to 1.5% year-on-year, against growth of 0.7% in December and above the three-month average of 0.9%. Food inflation also increased, to 3.9% year-on-year, against growth of 3.3% in December above the three-month average of 3.4%. There were also similar rises in ambient and fresh foods.
Helen Dickinson, chief executive of the BRC, commented: “Any suggestion inflation has peaked is simply not borne out by these figures. Shop price inflation jumped this month due to high business energy costs and the hike to National Insurance continuing to feed through to prices.
”Meat, fish and fruit were particularly affected, also reflecting weak supply and stronger demand, while non-food categories including health and beauty saw inflation rise.
“It’s a challenging time for households. Retailers do what they can to keep prices down in a competitive market, but thin margins and the rising costs of Government policy make it harder. The Government must double down on costs in order to support households. A good place to look is the spiralling energy charges, especially non commodity levies, which are raising operating costs, squeezing margins and flowing through into retail prices.”
Mike Watkins, head of retailer and business insight at researchers NIQ, added: “Shoppers are always cautious about spending in January and this will not be helped by the continuation of inflation. However, there are still savings to be made at the checkout as many food retailers continue to reduce prices on everyday items as a way to drive footfall.”
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