2 Minutes by Reuters Staff Read A customer shops at a Morrisons store in St Albans, Britain, on September 10, 2020, while wearing a protective face mask. REUTERS/File Photo/Peter Cziborra (Reuters) – LONDON (Reuters) – Due to a vigorous struggle between supermarkets, prices charged by British retailers declined somewhat quicker in June than in May, but rising costs tied to COVID-19 and Brexit may soon add to the rise in broader inflation, according to an industry organization. The British Retail Consortium’s shop pricing index for June indicated prices were 0.7 percent lower than a year ago, compared to 0.6 percent in May, the weakest reduction since February 2020. Unlike the wider measure of consumer price inflation intended by the Bank of England, which includes services and a wider range of commodities, shop prices as measured by the BRC often show year-on-year price reductions. Last week, the Bank of England predicted that CPI would rise beyond 3%, exceeding its objective of 2%, but that the increase would be mostly due to a global spike in energy prices and one-time supply chain disruptions caused by the coronavirus outbreak. The central bank maintained its belief that the increase in total inflation would be temporary. “The competitive retail landscape in the UK is reflected in the fact that shop prices remain in negative territory despite the recent jump in CPI,” said Mike Watkins, head of retailer and business intelligence at NielsenIQ, which co-produces the index. Retailer costs are growing as a result of higher food and fuel prices, Brexit-related red tape, and supply chain disruption caused by the pandemic, according to BRC Chief Executive Helen Dickinson. “As the pressure intensifies in the months ahead, especially with extra Brexit checks this autumn,” she warned, “the increased cost burden on merchants may be passed on to the consumer, risking price increases.” Between June 1 and June 7, the BRC gathered price data. William Schomberg wrote the piece, and Andy Bruce edited it. Continue reading
