Food price rise drove shop inflation higher in the festive period

Shop price inflation in Britain rose to 0.7% year-on-year in December, up from 0.6% in November, driven mainly by a 3.3% annual increase in food prices.

Shop price inflation in Britain inched up in December as food costs rose during the festive period. The British Retail Consortium and NielsenIQ reported overall shop price inflation at 0.7% year-on-year in December, up from 0.6% in November. Food price growth was the primary contributor, while non-food categories remained in mild deflation. Key figures: - Overall shop price inflation: 0.7% year-on-year in December, compared with 0.6% in November. - Food price inflation: 3.3% year-on-year in December. - Fresh food rose 3.8% annually; ambient food rose 2.5% annually. - Non-food inflation remained at -0.6% year-on-year. - Industry bodies reported widespread promotions and retailer price reductions over the season, and said shoppers prioritised affordability. Summary: The modest rise in December shop price inflation reflects stronger food cost growth during the festive season alongside continued non-food deflation. Industry comments point to potential easing from falling energy costs and improved crop supplies, but also note that higher public policy costs and regulation could keep inflation persistent. Undetermined at this time.