Wednesday, 31 May 2017

Food inflation 'hits three-year high' on weak pound

Food prices climbed at their fastest rate for more than three years in May as the weak pound pushed up import prices, new research shows.

The British Retail Consortium measured the prices of 500 everyday goods and found food inflation was 1.4% during the month, up from 0.9% in April.

But it said overall inflation including non-food items had fallen.

It comes as another study found a surprise pick-up in consumer confidence despite a predicted pre-election slump.

According to the BRC, processed food prices showed the steepest rise in May, at 1.8%, up from 0.8% in April, while fresh food inflation was 1.2%, up from 1%.
It blamed the pound, which has fallen about 16% since the Brexit vote last June, increasing costs for businesses that import goods into the UK.

BRC chief executive Helen Dickinson said: "With shorter stock turnaround times, the impact of the weaker pound has already started feeding through into food prices, although food price inflation this month is still well below the input cost price increases being faced by retailers."

Despite the rising food prices, overall inflation fell, with the prices of non-food items 1.5% lower than a year ago.

BBC      News.