–UK BRC Nov Shop Prices Flat M/M, +2.0% Y/Y
–UK BRC Nov Food Inflation Flat M/M, up 4.0% y/y
–UK BRC Nov Non-Food Prices Flat M/M, up 0.8% y/y
LONDON (MNI) – Annual shop price inflation fell to its lowest level
in twelve months, the latest British Retail Consortium-Nielsen Shop
Price Index shows.
Shop prices were unchanged on the month and rose 2.0% on the year,
compared to October’s 2.1% annual rise.
Food inflation was also unchanged on the month and fell to 4% on
the year from October’s 4.2% rise. Non-food inflation was also unchanged
on the month but was just 0.8% up on the same month a year ago.
The slowing in overall inflation was driven by easing food
inflation, which has slowed for two consecutive months now. The survey
also notes that fierce competition and pressure on suppliers continues
to weigh on margins.
The BRC-Nielsen survey predicts that shop prices will continue to
fall in December as retailers increase the availability of discounts and
special offers in the lead-up to the Christmas trading period.
This latest shop price survey should reinforce the confidence of
the BOE’s Monetary Policy Committee that inflation should fall back
sharply in 2012 in line with its forecast.
Looking ahead to next year, the latest letter from Bank of England
Governor Mervyn King to Chancellor George Osborne suggested that
inflation could fall back over the next six months and reach the BOE’s
2% target by the end of next year after price pressures ease and the VAT
rise falls out of annual comparisons.
King has said that he would like to see more evidence that
inflation will fall in line with the BOE’s target before sanctioning
further quantitative easing. Markets are expecting a further extension
of QE in February when the current stg75bn programme expires.
–London Bureau; Tel: +44 (0)207 862 7485; email:
sanjukta.moorthy@ntkn.com
[TOPICS: M$B$$$, MABDS$, MT$$$$]