–UK BRC Apr Shop Prices Up 2.0% y/y vs Up 1.2% y/y Mar
–UK BRC Apr Shop Prices +0.3% m/m Vs Unchanged m/m in Mar
–UK BRC Apr Food Prices +2.0% y/y; Non-Food +2.0 y/y
–BRC Blames Costs, Including Oil, Base Effects For Inflation Surge
–BRC Says The Impact Of Past Falls In Sterling Now Been Felt

LONDON (MNI) – UK shop price inflation picked up in April due to
higher food prices as well as pressure from higher costs due to rising
oil prices, according to the British Retail Consortium-Nielsen Shop
Price Index.

The BRC shop price index was up 2.0% on the year in April, up from
1.2% in March. On a month-on-month basis shop prices rose 0.3% after
being flat in March.

Food price inflation rose 2.0% year on year following a 1.2% annual
climb in March and rose 0.5% month on month after being unchanged in
March. Non-food also rose 2.0% on the year after a 1.3% rise in March.
Non-food rose 0.2% on the month after being flat in March, the BRC said.

The data will raise concerns UK inflation, having hit 3.4% in
March, will not fall back in the second quarter as the BOE had forecast.
The BOE predicted in its February Inflation Report that CPI, after
averageing 3.33% in Q1, would drop to 2.76% in Q2, but the BRC data show
prices picking up in the first month of the second quarter.

The BRC said that some of the non-food inflation pressure could be
attributed to the reversal of the temporary value added tax reduction
and said that this would continue to have an impact on inflation through
the rest of this year.

But additional pressures on inflation are coming through from
commodity prices, the BRC said, including oil which was boosting
transport costs.

The BRC said, however, that it was confident that the “vast
majority” of the past depreciation seen in sterling has now filtered
through. But there was a possibility of further inflation pressure from
this source when long-term supply contracts got renegotiated.

The rise in food inflation is blamed by the BRC on the sharp falls
seen in inflation at the same time last year as a result of late
harvests and poor yields.

Fresh food prices rose by 1.2% year on year in April, up from a
0.5% rate in March and ambient food prices rose by 3.0% on the year in
April, up from 2.2% in March. Fresh food rose 0.3% on the month and
ambient prices rose 0.7% after a 0.2% fall in March.

The BRC said that the impact of flights disruptions due to the
Icelandic volcano eruption had been limited, given that only 1% of fresh
food imports into the UK are delivered by plane.

Stephen Robertson, British Retail Consortium Director General,
said:

“Rising costs edged overall shop price inflation up, but it’s still
below the rates seen in December and January. With commodity prices,
including oil and cocoa going up, food prices were almost bound to rise
when compared with last month’s three-year low.”

“The main effects of rising costs and the weak pound have now
been felt. With demand still weak, shop prices should be more stable in
future months, as long as there are no more big shocks,” Robertson
added.

–London newsroom: +44 207 862 7492; email: ukeditorial@marketnews.com

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