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By
Reuters
Published
Jan 7, 2015
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UK shop prices fall less sharply in December

By
Reuters
Published
Jan 7, 2015

LONDON, United Kingdom - Prices in British shops fell last month at a slightly slower pace and food prices edged up after falling for the first time on record in November, the British Retail Consortium said on Wednesday.

The BRC said retail prices were 1.7 percent lower in December than a year earlier, compared with a 1.9 percent fall in November that was jointly the steepest on record, along with October and July.



Plummeting inflation in recent months has boosted Britons' spending power and pushed back expectations of when the Bank of England will start to raise interest rates. Consumer prices increased by just 1.0 percent in November compared with a year ago -- the smallest increase in 12 years.

"With little external pressure to move prices upwards and an uncertain level of consumer demand, retailers will be cautious about price increases so we can expect a continuation of deflation for at least the first part of 2015," said Mike Watkins, head of retailer and business insight at survey compiler Nielsen.

Food prices rose 0.1 percent in December compared with a 0.2 percent decline in November -- the first fall since the BRC started collecting data in December 2006.

Food prices have been dragged down in a price war among Britain's major supermarkets, spurred by discounters like Aldi and Lidl which are taking a growing market share.

The BRC survey is designed to reflect price changes in 500 of the most commonly bought high street products in shops.
 

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