# UK shop price inflation hits record 8% in January: BRC
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-01
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: UK Shop Prices Surge: Highest Inflation Since 2006
Meta Description: January saw a record 8.0% price increase in UK shops, driven by soaring food costs. Analysts predict spike may continue as energy prices rise.
URL: https://financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brchtml

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By David Milliken

LONDON (Reuters) – Prices in British shops in January were 8.0% higher than a year before, the biggest annual increase since at least 2006 when comparable records started, figures from the British Retail Consortium (BRC) showed on Wednesday.

Inflation hit a record high in all the main categories monitored by the BRC, led by a 15.7% increase in the cost of fresh food, which reflected high wholesale prices for fruit and vegetables and increased processing costs.

Overall [food prices](https://www.financedigest.com/france-leans-on-retailers-to-help-consumers-cope-with-food-prices.html "France leans on retailers to help consumers cope with food prices"), which include longer-life goods, rose by 13.8%, while non-food prices were 5.1% higher.

Many British households have been hit hard by a surge in the [cost of living](https://www.financedigest.com/indefensible-uks-sunak-under-fire-over-response-to-cost-of-living-crisis.html "‘Indefensible’: UK’s Sunak under fire over response to cost of living crisis") since Russia’s invasion of Ukraine in February 2022. On Monday the Office for [National Statistics said 5% of homes](https://www.financedigest.com/still-living-at-home-a-third-of-the-nation-cant-afford-to-rent.html "Still living at home? A third of the nation can’t afford to rent") reported running out of food and being unable to buy more.

The Bank of England has forecast that inflation will [remain high over the coming months](https://www.financedigest.com/6-months-to-go-until-brexit-and-investor-sentiment-remains-bold.html "6 months to go until Brexit and investor sentiment remains bold") before falling later in 2023, and is widely expected to raise its main interest rate on Thursday to 4%, the highest since 2008.

BRC chief executive Helen Dickinson said she did not think shop prices had peaked yet, as retailers were still facing rising [energy bills](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record") and labour shortages.

Although European natural gas prices have fallen in recent months, they are still several times [higher than they were in early](https://www.financedigest.com/five-reasons-to-start-saving-early-for-higher-education.html "Five Reasons to Start Saving Early for Higher Education") 2021 and the government will withdraw most of its energy subsidies for businesses in April.

The [BRC collected its price](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") data between Jan. 1 and Jan. 7. Figures released by [market research company](https://www.financedigest.com/generic-oncology-drugs-market-2021-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Generic Oncology Drugs Market 2021 Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") Kantar on Tuesday , which covered the four weeks to Jan. 22, showed annual grocery [price inflation](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") of 16.7%.

[Britain’s official](https://www.financedigest.com/hong-kong-finance-official-to-make-first-visit-to-britain-in-three-years.html "Hong Kong finance official to make first visit to Britain in three years") consumer price index inflation measure, which covers a wider range of goods and services, dropped to 10.5% in December after hitting a 41-year high of 11.1% in October. Food and drink [prices were up 16.8% on the year](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll") in December, the most since 1977.

(Reporting by David Milliken; Editing by William Schomberg)


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