Ukraine war and energy costs push UK retail prices to highest level since 2011

·2-min read
Retail prices surge as consumers face the tightest cost of living squeeze since the 1970s. Photo: Daniel Leal/AFP via Getty
Retail prices surge as consumers face the tightest cost of living squeeze since the 1970s. Photo: Daniel Leal/AFP via Getty

UK retail prices surged last month as the Ukraine war and soaring energy prices pushed price inflation to the highest level since September 2011.

Figures from the British Retail Consortium (BRC) show shop price annual inflation accelerated to 2.7% in April, up from 2.1% in March, and above the 12- and 6-month average price increases of 0.4% and 1.5%, respectively.

"The impact of rising energy prices and the conflict in Ukraine continued to feed through into April’s retail prices," said Helen Dickinson OBE, CEO of the BRC.

"This has been exacerbated by disruption at the world’s largest seaport, following Shanghai’s recent lockdown. Food prices continued to rise, though fresh food inflation slowed as fierce competition between supermarkets resisted price hikes on many everyday essentials."

Food inflation increased to 3.5% last month, up from 3.3% the month prior, above the 12- and 6-month average price growth rates of 1.3% and 2.6%, respectively, and the highest inflation rate since March 2013.

According to the data, fresh food inflation fell to 3.4% in April, down from 3.5% in March, marking the second highest inflation rate since March 2013.

Image: BRC
Image: BRC

The prices of shelf-stable food including tinned products ambient food pushed to 3.5% in April, up from 3.0% in March, climbing above the 12- (1.4%) and 6-month (2.3%) average price surges to the highest rate of increase since January 2013.

Meanwhile, non-food inflation rose to 2.2% during the period, up from 1.5%. This marks the highest rate of inflation since the data series began in 2006, the BRC said. Non-food products, especially furniture, electricals and books, have seen the highest rate of inflation since records began.

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Experts say shoppers face a "bumpy road ahead" with additional price rises as Briton's face the tightest cost of living squeeze since the 1970s as the energy price cap went up by 54% in April.

Dickinson added: "Global food prices have reached record highs, seeing a 13% rise on last month alone, and even higher for cooking oils and cereals.

"As these costs filter through the supply chain, they will place further upward pressure on UK food prices in the coming months."

Mike Watkins, head of retail and business insight at NielsenIQ warned that surging inflation will impact consumer spending despite retailers' attempts to keep prices down.

"With food retailing no longer immune to these pressures, supermarkets are reacting by cutting the prices of some everyday grocery products including private label to help limit shop price inflation."

Watch: How does inflation affect interest rates?

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