Cost of living squeeze continues
Responding to the latest CPI inflation figures which show headline inflation at 6.2%, and food inflation at 5.1%, Helen Dickinson, chief executive of the British Retail Consortium, said: “Rising inflation remains a significant concern for the economy, squeezing household incomes and increasing cost pressures on retailers. For the second month in a row, Transport saw the highest rate of inflation this month, while food inflation rose slower than the headline rate. The BRC’s Shop Price Index, which tracks the price of basic goods, showed an even smaller price rise in food, suggesting that retailers are successfully managing to limit cost increases for many essential groceries. Many supermarkets have expanded their value ranges to support individuals and households on lower incomes. Nonetheless, with retailers struggling to absorb these higher costs, shop prices look set to rise in the coming months.
“The situation in Ukraine is undoubtedly exacerbating existing cost pressures in the supply chain – from increased energy costs to higher global commodity prices. Many households will also face far higher energy bills and NI contributions from next Friday. As a result, all eyes will be on today’s Spring Statement, to see if the Chancellor will announce any relief for those families most affected by the cost of living squeeze.”
Notes:
- ONS Consumer Price Index figures, February 2022.
| Year on Year changes | Jan-22 | Feb-22 |
| CPI (overall index) | 5.5% | 6.2% |
| 01 Food and non-alcoholic beverages | 4.3% | 5.1% |
| 02 Alcoholic beverages and tobacco | 3.2% | 3.5% |
| 03 Clothing and footwear | 6.3% | 8.9% |
| 04 Housing, water, electricity, gas and other fuels | 7.1% | 7.2% |
| 05 Furniture, household equipment and maintenance | 8.4% | 9.1% |
| 06 Health | 2.2% | 2.6% |
| 07 Transport | 11.3% | 11.5% |
| 08 Communication | 1.1% | 1.1% |
| 09 Recreation and culture | 2.9% | 4.7% |
| 10 Education | 4.5% | 4.5% |
| 11 Restaurants and hotels | 4.7% | 5.0% |
| 12 Miscellaneous goods and services | 1.7% | 1.9% |
- The BRC-NielsenIQ Shop Price Index, which includes a basket of 250 essential food items (and 250 basic non-food items) showed essential food prices rising 2.7% in February 2022. This suggests food inflation is lower for essential goods.
| Year on Year changes | Jan-22 | Feb-22 |
| BRC-NielsenIQ Shop Price Index | 1.5% | 1.8% |
| Food (based on 250 basic food items) | 2.7% | 2.7% |
| Non-Food (based on 250 basic non-food items) | 0.9% | 1.3% |
