Weak pound shows no “visible impact” as deflation continues

UK retail prices continued to decline last month despite growing pressures from the devaluation of the sterling.

New figures from the Nielsen-BRC Shop Price Index reveal that deflation in November was 1.7 per cent, unchanged from the previous month.

Although non-food deflation accelerated to 2.3 per cent, growing from 2.1 per cent in the previous month, food deflation plummeted to 0.8 per cent from 1.2 per cent in the previous month.

“These figures once again point to retailers‘ effectiveness in controlling the inflationary pressure that continues to build through the devaluation of the pound,” British Retail Consortium (BRC) chief executive Helen Dickinson said.

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“We have still yet to see any visible impact from the weaker pound on shop prices, but we do expect to see a gradual slowing of the rate of deflation.

“Increasingly value-driven and informed customers mean retailers will have to remain highly competitive.

“So while we may start to see cost pressures beginning to feed through into prices next year, we don‘t expect any sudden spikes or surges, and the timing and extent of increases will differ from one category and retailer to the next.”

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