UK Shop Price Deflation Slows: BRC

(RTTNews) - UK shop prices dropped at a slower pace in November, signalling that shoppers are set to face rising price pressures, the British Retail Consortium revealed on Tuesday.

The shop price index declined 0.6 percent on a yearly basis in November, slower than October's 0.8 percent decrease.

Food price inflation softened to 1.8 percent from 1.9 percent in October. At the same time, non-food prices declined 1.8 percent, following a 2.1 percent decrease.

"November was the first time in 17 months that shop price inflation has been higher than the previous month, albeit remaining overall in negative territory," BRC Chief Executive Helen Dickinson said.

"With significant price pressures on the horizon, November's figures may signal the end of falling inflation," Dickinson added.

"Shoppers are still being cautious by shopping savvy for the essentials and holding back their discretionary spend, so the lower level of inflation should help sentiment ahead of Black Friday promotions," NielsenIQ Head of Retailer and Business Insight Mike Watkins said.

Moreover, with inflation being slower than in the same period of last year, many food retailers are extending offers and discounts to help sales momentum in December, Watkins noted.

Official data showed that consumer price inflation moved above the 2 percent target again in October.

Earlier this month, the Bank of England had reduced its benchmark rate by 25 basis points to 4.75 percent. However, the bank said it will move only gradually with further reductions as the Autumn Budget added upward pressure on inflation.