U.K. shop-price inflation accelerated in March as rising oil prices helped to push up the cost of manufacturing and transporting food, the British Retail Consortium said.
Retail prices rose 1.5 percent from a year earlier, the most since December, compared with a 1.2 percent gain in February, the trade group and Nielsen Co. said in a report in London today. Food-price inflation quickened to 5.4 percent, the fastest since June, compared with 4.2 percent in February.
Oil prices have soared 25 percent in the past six months, pushing up manufacturers’ costs, while global food prices have gained 2.1 percent this year. Bank of England officials will maintain their target for bond purchases at 325 billion pounds ($519 billion) tomorrow, according to a survey of economists, as some officials raise concerns about the pace of inflation.
“Consumers are having to cope with falling disposable incomes with fuel and household-energy costs also increasing,” said Mike Watkins, senior manager of retail services at Nielsen. “With inflationary pressure continuing in the food supply chain, we can expect supermarkets to keep a strong focus on promotional activity over the next few months.”
Non-food prices fell 0.9 percent in March from a year earlier, the largest drop in more than two years, compared with a decrease of 0.7 percent in February, the report showed. The biggest declines were at clothing and electrical-goods stores as they tried to drum up demand from consumers whose confidence is being hurt by a sluggish economic recovery, the BRC said.
To contact the reporter on this story: Scott Hamilton in London at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com