Research from the British Retail Consortium (BRC) has revealed that shop prices in August were down 0.3% from a year ago, the lowest rate since October 2021.
However the drop in prices was driven by non-food goods, such as clothing and furniture, which many retailers have discounted due to the miserable summer weather and continued cost-of-living pressures. These non-food goods were 1.5% lower in price this August than August 2023, with clothing struggling particularity badly. This suggests the situation is not as positive as it might appear after a summer of poor trading by many retail businesses.
Meanwhile food prices rose by 2% in August, which was slower than July’s 2.2% number.
The Bank of England believes inflation will creep back up to 2.75% before dipping back under 2% in 2025.