Britons have been warned the full impact of the Iran war is yet to hit supermarkets but will soon.
New figures show shop price inflation actually fell in April to 1.0% from 1.2% the month before, while food inflation fell to 3.1% from 3.4%. Both figures were helped by retailers offering discounts on items such as clothing and Easter eggs in an attempt to lure in shoppers.
Helen Dickinson, chief executive of the British Retail Consortium, warned, however, that shops were facing mounting pressures: “While we’re yet to see the full force of the Middle East conflict feeding into consumer prices, it will not be long before it begins to.
“Retailers already face mounting cost pressures from domestic policies, with an extra £10bn a year added over the past two years from employment costs, packaging taxes and more.
“This will be compounded as rising fuel, fertiliser and commodity prices begin to feed into business costs.”
Overall inflation rose from 3% to 3.3% in March, the first set of data reflecting the Iran conflict. The rise was largely driven by an increase in fuel prices due to the war.
Dickinson said the government could help to moderate shop price inflation by fixing the non-commodity charges that inflate energy bills for businesses.
“This could help mitigate the peak in food inflation, reducing the squeeze on struggling households who will ultimately bear the brunt,” she added.
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