UK food inflation fell to its lowest levels in 17 months in November, but the British Retail Consortium (BRC) has cautioned that this progress could be undone next year.
Data from the retail trade body revealed that food inflation had slowed to 7.8% in November, down from 8.8% the previous month as it benefited from lower energy prices, particularly in dairy products.
This is the seventh consecutive month of deceleration in food inflation, with the rate of increase at its lowest since July 2022.
The BRC also reported that fresh food prices returned to 6.7 per cent in November, down from 8.3 the previous month, and less than March’s peak of 17.8%.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
A smaller decrease was seen with the price of ambient food – food that can be stored at room temperature and are usually imported – which dipped to 9.2% in November from 9.5% in October. This was due to the weak pound as more food is imported in this category.
Despite the easing in inflation, BRC chief Helen Dickinson warned this work could be undone in 2024 due to rising costs such as business rates, corporation tax and the National Living Wage.
She said: “Retailers are committed to delivering an affordable Christmas for their customers. They face new headwinds in 2024 – from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations. Combining these with the biggest rise to the National Living Wage on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”
Last week, the Chancellor revealed a series of tax cuts and new measures, including the raising of minimum wage by over £1 to £11.44 an hour next April.
