The Consumer Price Index (CPI) rose by 1.0 per cent in September up from 0.6 per cent in the previous two months. Despite the ONS’s reluctance to attribute these inflationary pressures to the Brexit-induced fall in sterling, we feel some of these pressures are already starting to filter through - especially for dollar priced fuel which reacts quickly to exchange rate volatility. On a trade-weighted basis, sterling has dropped 16 per cent which will push up the headline rate of inflation over the next 12-24 months. The price of imported materials as a whole rose for only the fourth time in the last three years, up 9.0 per cent in September on a year ago. The trading environment is going to change considerably for both the retailer and consumer as we move into 2017 and beyond. On the demand side, consumers will be grappling with rising consumer inflation, to levels we have not seen in a number of years, coupled with a weakening labour market as companies scale down their investments and staff numbers. This will lead to an erosion of disposable income and put pressure on discretionary spending. Looking ahead, inflation will continue on its upward path, and to quote one ex-member of the Monetary Policy Committee, “we are just at the tip of the iceberg” in terms of inflationary rises. We expect CPI to break through the Bank of England’s 2 per cent target by Summer 2017, if not slightly before and will reach 3 per cent towards the second half of the year.
UK Retail Inflation Report
Retail Economics reports a range of retail inflation indices on a monthly basis. Subscribers have access to all data (analytical reports and interactive data) and category breakdowns including food inflation, non-food inflation, clothing and footwear, household goods, food, DIY and gardening, consumer electricals, commodity prices, exchange rates and more.
UK Retail Inflation - October 2016
The UK Retail Inflation report includes:
|Summary and economic overview|
|Consumer inflation by category|
|Prices, costs and margins|
|Comparison of inflation benchmarks|
|Producer and Factory Gate inflation|
|Summary of external retail sales sources including Office for National Statistics, British Retail Consortium, commodity prices, commodity benchmarks, exchange rates and more|
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