Retailers are limiting price rises despite escalating fuel costs and other pressures, according to British Retail Consortium (BRC) director general Kevin Hawkins.
The BRC's Shop Price Index showed that overall prices in May increased by 0.18 per cent month on month and 1.53 per cent year on year. Hawkins said: 'Competition is restraining the rate of retail-based inflation, while consumer demand remains at levels that should give the MPC no cause for concern.'
The food sector experienced greater increases, attributed to reduced milk supplies, the impact of oil prices on freight costs and the effect of Avian flu on the ready meal market.
Separately, the BRC-KPMG Retail Sales Monitor showed a year-on-year sales rise for May of 3.7 per cent like for like and 6.5 per cent in total.
However, Hawkins warned: 'While the weather helped create a feel-good factor, much of the spending on clothing and footwear was due to purchases that shoppers had delayed in March and April because of the wet and cold.'