UK retail body says store price rises slow, easing inflation pressure.

According to the British Retail Consortium (BRC), shop prices in the UK rose at the slowest pace in two and a half years this month, indicating that inflation in the sector has normalized after previous surges.

In the latest sign of easing inflationary pressures, the BRC reported that annual shop price inflation fell to 0.6% in May from 0.8% in April, the smallest increase since November 2021.

Prices for non-food items decreased by 0.8% annually, compared to a 0.6% decline in the previous month.

Food inflation eased for the 13th consecutive month, falling from 3.4% to 3.2%, the lowest level since February 2022.

Mike Watson, Head of Retailer and Business Insight at NielsenIQ, said: "After months of falling input prices, we are now seeing food inflation stabilizing, with retailers continuing to pass on price reductions to consumers."

"Despite easing inflationary pressures and improving consumer sentiment, unseasonal weather has dampened retail sales. As a result, lower prices are expected to continue, and promotional activities may increase to drive demand."

The Bank of England is considering the timing of its first interest rate cut since 2020, with particular attention to the prices of UK services, which are growing at a rate close to 6%, in contrast to the sharp cooling of goods prices.