UK inflation slowed to 4.6% in October, its lowest pace since 2021, with data from the Office of National Statistics also showing that clothing and footwear retail price inflation also dipped.
Driven by the settling of energy prices, inflation in the year to October was down from 6.7% the month before. The Consumer Prices Index also showed clothing and footwear inflation was down from 6.9% for the 12 months to September to 6.2% for the corresponding period in October.
Additionally, furniture and household goods inflation reduced from 3.7% to 3.1%, with food inflation falling 2 percentage points to 10.1%.
The figures have been welcomed by the British Retail Consortium, its chief executive, Helen Dickinson, said: “After a brief pause in September, inflation is once again headed in the right direction, helped by the seventh consecutive month of falling food inflation. Clothing & footwear and furniture inflation also eased as retailers competed to offer the best value for customers ahead of the festive season.”
Dickinson did warn that without a reduction in business rates there could be still be price rises and shop closures.
“Retailers are working hard to keep prices down for hard pressed customers. Unfortunately, these efforts will be tested by a £480mn-a-year increase in business rates from Spring 2024.
“Unless the Chancellor takes action and freezes business rates at the Autumn Budget, we could see added cost pressures filtering through to consumer prices. Higher rates would also damage the viability of many local communities by reducing the incentive to open new shops and increasing the risk of shop closures,” she added.
Furthermore, there are concerns that oil prices have been rising once more and consumer demand remains low. The GfK consumer confidence index dropped to a three-month low of -30 in October, from September’s reading of -21.
“Higher wage bills are pushing up business costs,” noted Dickinson. “Such pressures would be exacerbated by the planned rise in business rates next year.”
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