The statistics for the Consumer Price Inflation indices (CPI) released today reveal that the Consumer Prices Index (CPI) has turned positive, growing by 0.1% in the year to July 2015, up from 0.0% in the year to June 2015. A smaller fall in clothing prices on the month compared with a year ago was the main contributor to this rise in inflation, according to the ONS, and falling prices for food and non-alcoholic beverages partially offset the rise.
Phil Mullis, partner and head of retail and wholesale at chartered accountant Wilkins Kennedy, comments: “The decline in falls of clothing prices could simply be down to the good weather, so clothing retailers are shifting all the stock they’re ordering in, reducing the need to discount it. It will be interesting to see what the statistics bring next month when not only will there be a change in the weather which could see a difference in the end-of-line stocks, but also the fall in fuel costs will keep ticket prices in check.
“Whilst it is true that the wage rises and low inflation has put more money in consumers' pockets, we are still only able to spend, and consume, so much, particularly in the clothing sector. As for the figures in relation to food and non-alcoholic drinks, it will be interesting to see whether or not the recent stories in relation to milk and the profits the supermarkets are making, will change the figures next month. Overall, it is true to say that these figures are well in line with expectations and it looks as though the retail landscape is remaining steady.”