UK Shop Prices Fall Less Quickly as Retailers Eye Cost Pressures

• Prices in British shops fell a bit less sharply in January than in December and food costs rose at the fastest monthly pace since April last year, according to a survey published on Tuesday.
• Annual shop price deflation of 0.7% this month was less than in December when prices were down by 1.0%, the sharpest drop in more than three years, the British Retail Consortium (BRC) said.
• Food prices were up by a monthly 0.5% in January, a stronger rise than December's 0.1% increase. Overall prices fell by 0.4% between December and January.
• Helen Dickinson, chief executive of the BRC noted that retailers might have to push up prices in response to the higher social security contribution requirements announced by finance minister Rachel Reeves along with an increase in the minimum wage and a new packaging levy.
• "Without action, UK households will feel the effects," Dickinson said calling on the government to offset the increase in costs for the sector by ensuring retailers do not have to pay more in property taxes.
• Britain's headline rate of inflation fell to 2.5% in December but is expected to rise again with some economists forecasting that it will hit 3% in January.

(Source: Reuters)