Food Inflation Hits Two Year Low in UK

Stephen Robertson, British Retail Consortium Director General, said: "A two-year low for food inflation is good news for hard-pressed households still suffering falls in disposable incomes. Lower shop price inflation is helping to narrow the gap between living costs and wage increases.

1 Aug 2012 --- A report on shop price inflation slowed to 1.0% in July from 1.1% in June. Food inflation fell to 3.1% in July from 3.5% in June. Deflation in non-food was unchanged at 0.3% in July.

Stephen Robertson, British Retail Consortium Director General, said: "A two-year low for food inflation is good news for hard-pressed households still suffering falls in disposable incomes. Lower shop price inflation is helping to narrow the gap between living costs and wage increases.

"Extra promotions, particularly linked to party food and this summer's big events, are combining with past falls in commodity prices which are working their way through to shop prices.

"But the relief may not last. Poor harvests, especially of corn and wheat in the USA, are creating a build-up of inflationary pressure. Animal feed has risen sharply in recent months and is likely to affect prices for things like meat, poultry and eggs.

"Overall, non–food goods were cheaper than a year ago for a sixth month as retailers discounted to generate sales. Great news for customers who have spare money to spend on clothing, electricals and furniture. But many don't have money available or the confidence to spend even with prices down."