The British Retail Consortium has welcomed falling inflation but warned the government risks adding £400m additional pressures on prices without a business rates freeze.
The latest data from the Office for National Statistics (ONS) showed that food inflation in July fell to its lowest level in almost a year to 14.8%, while clothing retailers mitigated unseasonably wetter weather by offering larger discounts for consumers.
Despite the progress being made on inflation, BRC chief executive Helen Dickinson warned the government that if it failed to act on the next scheduled business rates rise in April 2024, customers could see prices rise again.
She said: “There remains potential stumbling blocks ahead. Retailers continue to invest heavily in keeping falling prices on track. The government can support these efforts by freezing business rates from next April, or else risk adding £400m in additional pressure on prices.”
Inflation slowed last month to 6.8%, down from 7.9% due to lower energy costs, but stubbornly high food prices combined with restaurant and hotel costs kept the pressure on households.
While inflation is lower than its 11.1% peak in October, it remains much higher than the Bank of England’s 2% target.
The ONS figures follow the latest food inflation figures for the four weeks to August 6, published by Kantar earlier this week. They showed that grocery price inflation fell 2.2 percentage points to 12.7%.
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