British shoppers were hit by the biggest increase in prices charged by major retailers in more than nine years in January, according to a survey that added to signs of accelerating inflation momentum.
The British Retail Consortium announced on Wednesday – a day before the Bank of England is expected to raise interest rates for the second time in two months – that shop prices rose by 1.5% in January, compared to the same month in 2021.
That was the biggest annual increase since December 2012, and almost double December 2021’s 0.8% rise.
Food Prices Increase
Food prices rose by 2.7% – the most since October 2013, and up from 2.4% in December – which reflected poor harvests, labour shortages, and rising global food prices, the BRC noted.
The bigger impact came from non-food prices, which rose by 0.9% after falling by 0.2% in December, led by furniture and flooring, which saw exceptionally high demand.
Consumer Price Inflation Rate
Britain’s consumer price inflation rate, which measures a broad range of spending, hit a 30-year high of 5.4% in December – almost three times the BoE’s 2% target – and it is expected to squeeze demand for non-essentials this year.
“The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumers’ willingness to spend,” said Mike Watkins, head of retailer and business insight at NielsenIQ, which co-produces the data.
Research by NielsenIQ showed that nearly half of all households cited the rising cost of living as their most important concern.
News by Reuters, edited by Donna Ahern, Checkout. For more retail stories, click here. Click subscribe to sign up for the Checkout print edition.