(Allaince News) - Shop price inflation accelerated in May, to a new peak, although food inflation decelerated despite remaining at elevated levels, latest figures showed.
According to the latest British Retail Consortium-NielsenIQ tracker, shop price inflation increased to 9.0% in May, on an annual basis, up slightly from 8.8% in April. This is above the 3-month average rate of 8.9% and takes shop price growth to a fresh high.
Helen Dickinson, chief executive of the BRC said: "While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall."
Food inflation decelerated to 15.4% in May, down from 15.7% in April. This is the same as the 3-month average rate of 15.4%, and is the second highest inflation rate in the food category on record.
Non-food inflation accelerated to 5.8% in May, up from 5.5% in April. This is above the 3-month average rate of 5.7%.
Dickinson added: "The slow in inflation was largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples including butter, milk, fruit and fish."
"Conversely, the price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities. While non-food inflation rose, consumers are benefitting from heavy discounts in footwear as well as books and home entertainment," she commented.
Fresh food inflation decelerated in May, to 17.2%, down from 17.8% in April. This is below the 3-month average rate of 17.3% and is the second highest inflation rate in the fresh food category on record.
Ambient food inflation accelerated to 13.1% in May, up from 12.9% in April. This is above the 3-month average rate of 12.8% and is the fastest rate of increase in this category on record.
Dickinson said fierce competition between supermarkets has helped keep British food among the cheapest in Europe and while there is reason to believe that food inflation might be peaking, "it is vital that government does not hamper this early progress by piling more costs onto retailers and forcing up the cost of goods even further."
She felt the "biggest risk comes from policies such as the incoming border checks and reforms to packaging recycling fees."
By Jeremy Cutler, Alliance News reporter
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