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Food price inflation stabilises

Food price inflation stabilised in May, after rising fuel and property bills were offset by a decline in the cost of raw materials.

In May food prices saw a 4.3% increase in 2011 levels, the same increases as recorded in April. Declining rates of increase for store cupboard food products was offset by rising fresh food prices.

Food inflation has remained steady since last October, apart from a blip in March.

The shop price of non-food goods has fallen in comparison with 2011 levels for the fourth month in a row, although the rate of decline has fallen.

The latest decline has been attributed to price cuts on clothing, footwear and electricals, as retailers cut margins to encourage consumers to spend.

Stephen Robertson, director general of the British Retail Consortium said that the he slowdown in non-food price cuts – from -0.5% in April to -0.1% in May – was because some retailers were offering “margin-sapping discounts which reached unsustainable levels” and had been forced to raise their prices.

Shop price inflation is now running at 1.5%, ahead of April’s 1.3%.

In April the consumer price index fell to a 26 month low of 3%, as high street discounting took pressure off households.

This was posted in Bdaily's Members' News section by Ruth Mitchell .