Prices at UK shops falling at the fastest pace over six years
03 Jul 2013
Prices at UK shops are falling at the fastest pace in over six years, offering cash-strapped consumers a welcome respite.
Prices in June were down 0.2 per cent as against the same month last year and were flat as against May, according to the shop price index of the British Retail Consortium (BRC).
The decline, which comes as the largest since February 2007 and before the credit crisis hit, was driven by a 1.9 per cent year-on-year drop in non-food prices with retailers cutting the price of clothing, DIY, and furniture to try to make up for lost sales due to the cold weather earlier in the year.
There was mixed news for consumers in June, however, as food inflation was up for the first time in seven months.
According to the BRC, food prices rose 2.7 per cent year-on-year in June, as against 2.4 per cent the previous month, due to price increase of fresh food and ambient food such as beverages.
According to Helen Dickinson, director-general of the BRC, the retail industry had given Mark Carney, the new Bank of England governor, a triple boost ahead of his first interest rates meeting.
She added, Mark Carney would chair his first Monetary Policy Committee meeting today with the help of a triple boost from the UK's retailers.
The news would give much relief to millions of households across the country who had been left counting the cost of rising inflation along with frozen wages.
The fall comes because, following the coldest spring for 50 years compounding consumers' money worries, stores left with unwanted stock had had to ramp-up their summer sales.
Non-food prices overall were down 1.9 per cent in June than the same month last year.
Among the items that offered substantial savings were clothes and shoes which were typically 6.7 per cent cheaper, with the biggest discounts in menswear and children's clothes.
Deflation in furniture and carpets was up from 1.8 per cent in May to 2.4 per cent in June, the lowest rate since September 2009.
The cost of electric goods was also falling, fuelled by new technology, cut-throat competition and households' aversion to making big purchases when they could avoid it.
Goods like TVs, DVD players, fridges, washing machines and ovens are among the items that offered the biggest savings as the average price of electrical items fell by 4.7 per cent last month.
According to Dickinson, the deflation was driven entirely by non-food, a reflection that the summer sales were well underway as retailers battled it out to shift stock and compete for customer spending.
