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BRC Shop Prices at Fresh High, Sterling Weighs On Outlook

UK DATA
MNI (London)

UK SEP BRC SHOP PRICE INDEX +0.7% M/M; AUG +1.1% M/M

UK SEP BRC SHOP PRICE INDEX +5.7% Y/Y; AUG +5.1% Y/Y

  • UK shop prices continued to rise in September. The headline index accelerated for the 13th consecutive month, up 0.6pp at a fresh high at +5.7% y/y (the series began in 2005).
  • Food inflation was the key driver, at a series high of +10.6% y/y. The Ukraine war has pushed up the costs of fertilisers, animal feed and cooking oil, which in conjunction with the summer drought in the UK has generated substantially higher food prices.
  • As the pound hovers around historic lows, higher fuel and goods import costs will see increased shop prices over coming months. This in conjunction with slowing demand due to falling disposable incomes signals that the UK retail sector will contract again in the BRC's September report due Oct 10.

Source: ONS

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