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2025-07-29 07:42:24
UK shop prices saw their biggest increase since April 2024 in July, with food prices surging. A survey showed that UK shop prices saw their biggest rise in over a year in the 12 months to July, with food prices rising even more strongly. The survey is another inflation signal, highlighting the Bank of England's interest rate dilemma. The British Retail Consortium (BRC) said on Tuesday that overall shop prices rose 0.7% year-on-year in July, the biggest increase since April 2024, following a 0.4% year-on-year increase in June. Food prices jumped 4.0%, the biggest increase since February 2024 and an increase from 3.7% in June. "With food price inflation rising for the sixth consecutive month, households are set to face higher food bills," said Helen Dickinson, BRC CEO. The BRC noted that prices for staples such as meat and tea rose sharply due to tight global markets, but discounts on fashion and furniture offered some relief to consumers. The UK's headline inflation rate rose from 3.4% in May to 3.6% in June, and is likely to rise above the Bank of England's forecast of a peak of around 3.7% in September. The central bank does not expect inflation to fall back to its 2% target until 2027. The Bank of England is expected to cut borrowing costs on August 7, the fifth cut since August last year, but will continue to stick to its "gradual and cautious" signal for further rate cuts.
