UK non-food inflation hit 2 year low in December, BRC says

Date: Wednesday 11 Jan 2012

Overall UK shop price inflation fell to a 1.7% on the year rate of increase in December, from 2.0% in November, according to the latest data from the British Retail Consortium (BRC).

The above despite the small 'up-tick' seen in food prices and as companies and individuals try to overcome very high energy prices.

Non-food inflation, at 0.3%, was actually at a two year low, after having risen by 0.8% in November.

Food inflation, on the other hand, rose to 4.2% in December from 4.0% in November.

Stephen Robertson, British Retail Consortium Director General, said: "This is a good bit of New Year news for customers. Even before the impact of last January's VAT rise comes out of the year-on-year comparisons, shop price inflation has reached a 16 month low of 1.7%. This is being driven by price cuts in electricals, clothing and footwear where many items are now cheaper than they were at this time last year. Non-food inflation of 0.3% is at a two year low.

"The Government's official measure of inflation is running at nearly 5% as businesses and householders battle with soaring utility and fuel bills. In this climate, retailers deserve credit for keeping costs down. Stiff competition throughout the sector resulted in a blizzard of promotions and discounts ahead of Christmas which will have been a particular help to families facing falls in their disposable incomes.

"Falling commodity prices take time to work through to tinned and packet foods but shoppers will see that happen in the coming months. Consumers are likely to rein in spending in the wake of Christmas and price will remain the main battleground between retailers, meaning customers with money to spend will benefit."

AB

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