Chancellor must act to ease inflation

Period Covered: 01 – 07 October 2023

• Shop Price annual inflation decelerated further to 5.2% in October, down from 6.2% in September. This is below the 3-month average rate of 6.1%. Shop price growth is at its lowest since August 2022.

• Non-Food inflation fell to 3.4% in October, down from 4.4% in September. This is below the 3-month average rate of 4.2%. Inflation is its lowest since September 2022.

• Food inflation decelerated to 8.8% in October, down from 9.9% in September. This is below the 3-month average rate of 10.1% and is the sixth consecutive deceleration in the food category. Inflation is its lowest since July 2022.

• Fresh Food inflation slowed further in October, to 8.3%, down from 9.6% in September. This is below the 3-month average rate of 9.8% and inflation in this category remains elevated. Inflation is its lowest since July 2022.

• Ambient Food inflation decelerated to 9.5% in October, down from 10.4% in September. This is below the 3-month average rate of 10.4% and is the lowest since October 2022

Note: Month-on-month % change refers to changes in the level of prices.

Helen Dickinson, OBE, Chief Executive of the British Retail Consortium, said:

“Shop price inflation eased for the fifth consecutive month to its lowest rate since August 2022. Imported goods saw higher levels of inflation due to a weaker pound, still-high producer costs and emerging trade frictions, while prices for some domestically produced foods, such as fruit, were lower compared to last month. Prices of children’s and baby clothing also fell as retailers continued to support families as the colder weather descended.

“Retailers have been battling to keep prices down for their customers in the face of rising transport costs, high interest rates and other input costs. To keep inflation heading in the right direction, it is vital that the Government does not burden businesses with unnecessary new costs. Without immediate action from the Chancellor, retailers have an additional £470m per year on their business rates bill, jeopardising the progress made. Ultimately, it’s consumers who would pay the price for the rising rates bill.”

Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said:

“Inflation has helped the topline sales growth of many food retailers this year but in reality, shoppers have been paying more and buying less. And the rest of the retail trade has seen less benefit due to the continued squeeze on discretionary spend. This this time last year pressure was growing on household incomes as inflation was accelerating in fuel, energy, and food so as inflation continues to decelerate, we now need an uptick in sentiment to help retail sales over the next 8 weeks”.