Hope for future as food inflation slows

Sep 4 2008 by Peter McCusker, The Journal

THERE was a glimmer of hope on the inflation front yesterday as high street data showed the rocketing rate of food inflation slowed markedly last month.

The British Retail Consortium (BRC) said food inflation posted its lowest monthly rise for five months to hit 10% in August. The month-on-month rise was 0.3%, down from 1.9% in July and the lowest since March’s no-change reading.

BRC director-general Stephen Robertson said the data “offered the prospect that we may be nearing the peak of food inflation”.

The measure has more than quadrupled over the past year thanks to soaring packaging, cooking oil and fat costs, and has been the main driver of overall upward price pressure on the high street. But oil prices have fallen nearly 33% since their July peak.

The BRC’s overall Shop Price Index, which measures the price movements of a range of high street goods, jumped 0.6% to 3.8% in August.

There was a third consecutive month of upward price pressure from the non-food sector, the BRC said, driven by more expensive furniture, floorcoverings, books and home entertainment.

BRC director general Stephen Robertson said of the SPI data: “There is some comfort from these figures. For the first time since March, the growth rate of food inflation slowed, offering the prospect that we may be nearing the peak of food inflation.”