The British Independent Retailers Association (Bira) says it remains concerned about high food prices despite the UK inflation rate dropping more than expected to 7.9 per cent in June.
The organisation, which works with over 6,000 independent businesses of all sizes across the UK, warns high food prices reduce the discretionary spending that is the ‘lifeblood of thousands of independents’.
According to the Office for National Statistics, price rises have slowed down more than expected from 8.7 per cent in May but inflation still remains high. Falling fuel prices are contributing to the slight deceleration while food prices have risen less quickly than in June last year.
Bira CEO Andrew Goodacre comments: “It is always good to see inflation falling and this month it’s by a larger amount than expected. However, we remain concerned about food inflation at 17 per cent because this reduces the discretionary spending that is the lifeblood of thousands of independent retailers. We can see that the producer price inflation has fallen significantly and we must hope and expect the food price inflation to fall much more in the near future.
“I also hope that the larger-than-expected fall in inflation changes the thinking at the Bank of England with regard to interest rates. Future increases may not be necessary and if they insist in raising rates, we must surely expect the size of any increase to be reduced. Higher interest rates are hurting small retailers who may still be paying back bounce-back loans and at very high rates.”