Retail news round-up on March 23, 2016: February inflation rate remains flat and Moody’s warn that Brexit would burden retailers and food suppliers with extra costs.
UK inflation remains unchanged in February
British inflation as measured by the Consumer Prices Index remained flat at 0.3% in February as price growth showed little sign of accelerating away from near-zero.
Food prices had the biggest increase, particularly vegetables, but transport costs fell, according to the latest ONS figures.
The biggest downward pressure on the inflation rate came from the transport sector, with price changes for items such as road passenger transport, second-hand cars and bicycles.
Prices of toothpaste and other personal care products also slipped, while higher prices for vegetables, milk, cheese and eggs made up for those declines.
The price of furniture and household equipment along with hotel accommodation and restaurant bills also went up.
Retailers and food firms face most risk with Britain leaving EU
Moody’s has warned that Britain leaving the EU could risk retailers, restaurants, and food and drink companies the most.
The credit ratings agency said that the uncertainty caused by exiting Europe would result in a slower economic growth over the medium term for firms based in the UK, due to additional trade barriers, delayed investment decisions, regulatory changes and curbs on migration to and from the country.
The biggest extra cost for food and drink retailers and suppliers would be a curb on their ability to recruit staff at lower wages from other European countries, it argued.