Next government must not take falling inflation for granted: BRC

Addressing key costs such as the business rates burden must be a priority for whoever forms the next government, UK' leading retailers body has said on Wednesday (19).

Britain’s annual inflation rate slowed in May to the central bank’s two-percent target, official data showed Wednesday, boosting prime minister Rishi Sunak’s struggling election campaign. The Consumer Prices Index slowed as expected from 2.3 percent in April, the Office for National Statistics said in a statement citing easing food prices.

That follows almost three years Britain’s above-target inflation, which last stood at two percent in July 2021 before surging higher in a cost-of-living crisis.

Responding to the latest CPI inflation figures, which show headline inflation falling to 2.0 per cent and food inflation falling 1.2 percentage points to 1.7 per cent, Kris Hamer, Director of Insight of the British Retail Consortium, said, "The country will breathe a sigh of relief as inflation hits the Bank of England’s target of 2 per cent for the first time in almost three years, raising hopes of an interest rate cut for the 9.6 million mortgage holders across the UK.

"Falling energy prices continue to be the main driver behind the fall in the headline rate however, a lower inflation rate in clothing and furniture also contributed. Food inflation fell the fourteenth month in a row, and those with a sweet tooth will be happy to see that the price of chocolate and confectionary products fell on the month.

"Hitting the 2 per cent target is welcome news, however, it is vital that inflationary progress is not taken for granted by the next government. Retailers are working hard to limit price increases for their customers, and the next administration must play their part in reducing cost pressures on retailers and the customers they serve.

"Addressing key costs such as the business rates burden, which leads to customers paying a higher price at the till, must be a priority for whoever forms the next government."