UK Oct Shop Price Inflation Holds Steady At -0.1% On Year: BRC

By David Robinson

     LONDON (MNI) - UK shop price deflation held steady in October at its joint

shallowest level in the past four years, British Retail Consortium data showed.

     High street deflation has evaporated in recent months with headline UK

inflation heading up to reach 3.0% on the year in September. The BRC Shop Price

Index showed food inflation up 2.2% on the year in October, offset by non-food

prices falling 1.5%.

     There was no change on the month in overall shop prices, with non-food

prices down 0.1% on the month and food prices up 0.3%.

     "Forces on inflation are pulling in both directions. On the one hand global

food prices continue to head upwards at the same time as the weaker pound has

left retailers facing significantly higher bills for imported goods. On the

other hand, the tightening squeeze on discretionary spending power is reducing

the ability of retailers to pass on increased import costs," Helen Dickinson,

Chief Executive, BRC said.

     The Bank of England Monetary Policy Committee has forecast that headline

inflation is likely to peak at just over 3.0% in October before drifting very

gently back towards its 2.0% target. The MPC's updated inflation forecasts will

be published Thursday.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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