According to a survey by the British Retail Consortium (BRC), shop prices in Britain declined for the first time since October 2018, falling by 0.1% YoY in June 2019. In comparison, this figure had increased 0.8% YoY during May.
Even though food inflation held steady during this period, this figure fell lower driven by non-food prices. Even though Brexit uncertainties reign in the markets, inflation is holding steady at a moderate level. In addition, wage growth has also continued to support household spending.
The BRC has cautioned that shop prices could fall further as the deadline for Brexit approaches. Given that the deadline for Brexit falls close to the holiday period, retailers and consumers can potentially face disruptions during the busiest period of the year, which would hit businesses harder.