Major British retailers increased their prices by the most in almost 11 years this month, according to a survey published on Wednesday that tallies with forecasts showing the country's inflation rate is set to accelerate further.
The British Retail Consortium said shop prices rose by 2.1% in March for the fastest annual increase since September 2011, gathering speed from February's 1.8% increase.
'Fierce Competition'
For most of the past year, the BRC's shop price inflation measure showed falls in prices, reflecting fierce competition between supermarkets and other big retailers. But it has now risen for five straight months.
Helen Dickinson, the BRC's chief executive, said rising costs were starting to be exacerbated by fallout from Russia's invasion of Ukraine which would become more severe.
Inflation
Britain's consumer prices inflation rate touched a 30-year high of 5.6% in February and is set to climb above 8% soon with domestic power tariffs due to jump by more than half in April, leaving households facing the biggest hit to their living standards this year since at least the 1950s.
The Bank of England raised borrowing costs for the third time in a row earlier this month, taking Bank Rate back to 0.75%, its pre-pandemic level and investors expect another hike in May to 1.0%.
Own Label Products
British shoppers turned to cheaper own label food products and discounters as they battled grocery price inflation of 5.2% over the four weeks to 20 March, the highest level since April 2012, according to industry data published on Tuesday.
Market researcher Kantar said it was evident a switch had started from the COVID-19 pandemic being the dominant factor driving shopping behaviour towards the growing impact of inflation, as the cost of living becomes the bigger issue on consumers' minds.
Overall UK inflation hit a 30-year high of 6.2% in February and the government's budget watchdog last week forecast it will go close to 9% in late 2022, contributing to the biggest fall in living standards since at least the 1950s.
News by Reuters edited by Donna Ahern Checkout. For more Retail stories click here. Click subscribe to sign up for the Checkout print edition.
