Shop price inflation almost doubled in January to the highest level for nearly a decade as the cost of furniture and flooring shot up.
Annual inflation of goods bought from retailers rose to 1.5% last month from 0.8% in December, according to the latest data from the British Retail Consortium (BRC) trade body and the market research company NielsenIQ, the highest level since December 2012.
The price of food rose by 2.7% in January, up from 2.4% in the previous month and the highest rate since October 2013. However, the biggest change in inflation was in non-food items, with prices rising by 0.9% compared with 0.2% a month before.
Annual UK grocery bill could rise by £180 amid cost of living squeezeRead more
Helen Dickinson, the chief executive of the BRC, said: “January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation. In particular, furniture and flooring saw exceptionally high demand leading to increased prices as the rising oil costs made shipping more expensive.
“Food prices continue to rise, especially domestic produce which have been impacted by poor harvests, labour shortages, and rising global food prices.”
The retail price of UK furniture was up by a record 12.5% on a year before in December according to the Office for National Statistics, in the fourth consecutive month of double-digit price rises.
A rise in the cost of materials, such as wood, and fuel has combined with a an increase in shipping and labour costs, which have affected many types of manufacturers and retailers.
Raw materials and shipping costs have also pumped up the prices of flooring, including carpets.
Dickinson warned of further price rises, on top of higher household bills, such as gas and electricity.
“Many households will find it difficult to absorb the additional costs, as well as others on the horizon. Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future,” she said.
The latest evidence on inflation comes after data showing that households’ annual grocery bills are on track to rise by £180 this year.
Grocery prices rose 3.8% over the four weeks to 23 January compared with the same period last year, according to the market research company Kantar. It said prices are rising fastest for fresh beef and poultry, savoury snacks, crisps, skincare and cat food but are falling for fresh bacon, vitamins and beer.
