Food price inflation in the UK has eased to its lowest level in nearly two years, providing some relief to households amidst surging energy costs and a fierce supermarket price war. The British Retail Consortium (BRC) shop price index shows a 5% increase in food prices compared to the previous year, marking a notable decline from the 6.1% inflation rate recorded in January. This easing inflation is attributed to decreasing input costs for energy and fertilizers, as well as intense competition among retailers to keep prices low.
The plunge in wholesale gas prices has resulted in lower household energy bills, further easing the financial burden on consumers. Major supermarkets have intensified efforts to price match, with Morrisons leading the way in highlighting comparable or cheaper prices than discounters such as Aldi and Lidl. Tesco, Asda, and Sainsbury's have joined the aggressive marketing drive to attract customers.
Overall shop price inflation dipped to 2.5% in February from 2.9% in January, with non-food prices experiencing a modest increase of 1.3% year-over-year. However, concerns remain regarding potential cost pressures on non-food items due to disruptions in shipping routes, and calls for government assistance on retailers' business rates bills continue ahead of the upcoming budget.