Inflation rises as government policies ‘continue to feed through to prices’

Shop price inflation rose to 1.5% year on year in January, compared to a rise of 0.7% in December, according to the latest BRC-NIQ Shop Price Monitor. This is above the three-month average of 0.9%.

Food inflation jumped 3.9% annually in January, against a growth of 3.3% last month, and above the three-month average of 3.4%.

Non-food inflation also increased at a rate of 0.3% compared with a drop of 0.6% in December. This was above the three-month average of -0.3%.

Both fresh food and ambient food inflation rose 4.4% and 3.1%, respectively, year on year. This compares with fresh food inflation growth of 3.8% and ambient food inflation of 2.5% in December. 

This was above the three-month average of 3.9% and 2.6%, respectively.

BRC chief executive Helen Dickinson said: “Any suggestion that inflation has peaked is simply not borne out by these figures. Shop price inflation jumped this month due to high business energy costs and the hike to national insurance continuing to feed through to prices. Meat, fish and fruit were particularly affected, also reflecting weak supply and stronger demand, while non-food categories, including furniture, flooring, and health and beauty, all saw inflation rise.

“It is a challenging time for households. Retailers do what they can to keep prices down in a competitive market, but thin margins and rising costs of government policy make it harder. The government must double down on costs in order to support households. A good place to look is the spiralling energy charges, especially non‑commodity levies, which are raising operating costs, squeezing margins and flowing through into retail prices.”