A report published by the British Retail Consortium (BRC) showed that price growth in British stores slowed sharply in May, reaching the lowest level since November 2021, which is another sign of easing inflationary pressures in the country. The Bank of England, which is preparing to ease monetary policy, is paying special attention to inflation in the services sector (now it is about 6%), in contrast to a sharper slowdown in commodity prices
BRC said that in May, prices in stores rose by 0.6% per annum after an increase of 0.8% per annum in April. Meanwhile, the fall in prices for non-food products accelerated to 0.8% per annum from 0.6% per annum in April. Food inflation slowed down again (for the 13th month in a row), reaching 3.2% per annum (the lowest value since February 2022), compared with 3.4% per annum in April.
"Although inflationary pressures have eased and there is some improvement in consumer sentiment, the unseasonal weather has weakened retail sales, so the price decline looks set to continue, and advertising activity is likely to increase and stimulate demand," the BRC said.
According to official data, in April consumer prices rose by 2.3% per year after an increase by 3.2% in March. The latest reading was the lowest since July 2021. Economists had expected inflation to slow to 2.1%. Meanwhile, core CPI - which excludes energy, food, alcohol and tobacco - rose by 3.9% per annum (the lowest rate since October 2021) after an increase by 4.2% in March. Consensus estimates suggested an increase by 3.6% per annum. On a monthly basis, core consumer prices rose by 0.9%, compared with the 0.6% increase in March and the market estimate of a 0.7% increase. The data also showed that on a monthly basis, the consumer price index increased by 0.3%, slowing sharply compared to March (+0.6%). Economists expected a 0.2% increase.