What's happened
Shop price inflation in the UK has dropped to a 2-year low of 1.3% in March, with food prices 3.7% higher than a year ago. Retailers have been fiercely competing on deals, leading to lower prices on Easter treats, dairy products, and chocolate. Non-food inflation also decreased to 0.2% in March from 1.3% in February.
Why it matters
The easing of shop price inflation in the UK is significant as it indicates a slowdown in the cost of living crisis for consumers. Retailers offering competitive deals have helped alleviate some financial pressure on households. The drop in inflation could potentially lead to increased consumer spending and positively impact the overall economy.
What the papers say
The British Retail Consortium (BRC) highlighted the impact of retailers competing fiercely on deals, especially in the lead up to Easter. The Guardian emphasized the role of retailers in cutting prices on Easter treats, clothing, and electrical goods amid a slowdown in consumer spending. Sky News mentioned the significant pressures retailers face in the coming months, such as rises in business rates and new border checks.
How we got here
The drop in shop price inflation follows ten consecutive months of falling food price inflation in the UK. Retailers have been responding to consumer spending slowdowns by offering discounts and promotions on various products, including Easter treats, dairy products, and clothing. The overall decrease in inflation is seen as a positive development amidst the ongoing cost of living crisis.
Common question
More on these topics
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Easter, also called Pascha or Resurrection Sunday, is a festival and holiday commemorating the resurrection of Jesus from the dead, described in the New Testament as having occurred on the third day after his burial following his crucifixion by the Romans
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The British Retail Consortium is a trade association in the United Kingdom.