Prices in British shops showed the smallest annual decline in over three years last month, adding to signs of growing inflation pressures after last year’s post-referendum fall in the pound, data showed on Wednesday, Reuters reports.
Overall shop prices showed annual deflation of 1.0 percent, after a 1.7 percent fall in January, the British Retail Consortium (BRC) said.
Food prices – which are picking up in Britain due to global price increases as well as the weaker pound – rose for the first time since April last year, up 0.4 percent on the year compared with a fall of 0.8 percent in January, it said.
The Bank of England expects inflation to rise to more than 2.7 percent by mid-2018, up from 1.8 percent in January and zero for much of 2015, pinching the pockets of consumers whose spending typically drives Britain’s economy.
“It is clear that the significant underlying cost pressures, which have been building over the last year are beginning to filter through into shop prices,” Helen Dickinson, chief executive of the BRC, said.
Greggs, a chain of high-street shops selling baked food, said on Tuesday that its profit margins this year would be dented by a jump in the price of ingredients and increased labour costs.