Weak pound pushes up food prices
Food inflation accelerated to 1.4% this month, up from the 0.9% rise in April, according to the British Retail Consortium (BRC).
“With shorter stock turnaround times, the impact of the weaker pound has already started feeding through into food prices; although food price inflation this month is still well below the input cost price increases faced by retailers,” said Helen Dickinson, BRC’s chief executive.
Food inflation impacted processed food more than fresh food, with ‘ambient’ food inflation rising to 1.8% in May, from 0.8% in April, and fresh food inflation climbing to 1.2%, up from 0.9%.
However, non-food prices fell 1.5% over the year to May compared to the 1.4% decline in April.
This meant overall shop prices continued to fall year-on-year.
Dickinson said: “We expect the general trend of inflation to be upwards over the course of the year, which will squeeze disposable income at a time when wage growth is slowing.”