November 28, 2018 / 12:19 AM / 12 days ago

UK shop prices rise for only third time since 2013 - BRC

LONDON (Reuters) - Prices in British shops rose for only the third time in five years in November, pushed up in part by higher global costs for cereals, an industry survey showed on Wednesday.

A woman pushes a shopping trolley past Christmas decorations for sale in a Tesco store in Manchester, Britain November 27, 2018. REUTERS/Phil Noble

Retailers, who have held down their prices in the face of tough online competition and weaker household spending power, lifted their prices by an annual 0.1 percent, the British Retail Consortium and market research firm Nielsen said.

In October, prices fell by 0.2 percent compared with a year earlier.

Food price inflation accelerated to 1.6 percent from 1.3 percent. Non-food prices showed the weakest deflation in more than five and a half years, as prices fell by 0.8 percent compared with October’s 1.1 percent decline.

The survey was conducted in early November and did not capture Black Friday discounts.

The BRC said the acceleration in food prices reflected a dip in inflation last year and higher cereal prices. But global food prices overall were falling, making a sustained rise unlikely, it added.

Britain’s official measure of consumer price inflation stood at 2.4 percent in October, down from a peak of 3.1 percent nearly a year earlier but still higher than the Bank of England’s 2 percent target.

The BoE expects inflation to drift down as it raises interest rates gradually.

Helen Dickinson, chief executive of the BRC, said the approach of Brexit was hurting confidence in the retail sector and a transition period was essential to allow retailers and suppliers the time to adapt.

Prime Minister Theresa May is struggling to overcome deep opposition in her Conservative Party and among other lawmakers to her Brexit plan, raising concerns about an abrupt, no-deal Brexit in four months’ time.

Reporting by William Schomberg, editing by David Milliken; william.schomberg@thomsonreuters.com; +44 20 7542 3484; Reuters Messaging: andy.bruce.thomsonreuters.com@reuters.net

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