Responding to the latest CPI inflation figures, which show headline inflation rising to 2.2% and food inflation unchanged at 1.5% in July, Kris Hamer, director of insight of the British Retail Consortium (BRC), says: “Despite prices falling MoM, headline inflation returned above the Bank of England’s 2% target. This was mainly driven by slowing deflation for gas and electricity bills, which had seen big price drops in July 2023 compared to this year.
"Food inflation was unchanged, after falling for the preceding 15 months, as increasing commodity costs over 2024 began to filter into prices, however key ingredients like rice and olive oil did see a welcome price drop on the previous month. There was also good news across wider retail, with prices for clothing, furniture and household appliances all down on the month before."
Furniture, household equipment and maintenance remained deflationary, dropping to -1.7 in July from -1.6% in June).
"With headline inflation showing signs of rising further, retailers face the prospect of another large rise in business rates next year, which are based on September inflation rates," Kris continues. "This penalises the retail industry, as retail products currently have generally lower inflation levels than the headline figure on which business rates rises are based.
"The Government should buy into retail by ending the 14 years of Conservative business rates rises, which have seen the multiplier increase by a third since 2010, harming the viability of many high street stores across the country.”
