Costs on key categories see a fall in stores
PRICES across key categories including chocolate and confectionery have seen a dip in the latest inflation statistics from the Office for National Statistics (ONS) as the CPI number hits a key Bank of England target.
According to the latest figures from the CPIH index, overall inflation sat 2.8% for the year to May 2024, falling 0.2 percentage points from where the number sat for April.
Whereas, the CPI number fell to the Bank of England’s target of 2%, meaning there could be further hopes of a cut in interest rates for mortgage holders across the UK.
This was primarily driven down by falling rates for energy prices as well as food and non-alcoholic drinks, the latter of which sat at its lowest rate since October 2021 at 1.7%.
The main downward effect which contributed to this fall in the inflation rate for food and drink came from the likes of bread and cereals, vegetables, sugar, jam, syrups, chocolate and confectionery.
This also marked the lowest annual rate in June 2022 on sugar, jam, syrups, chocolate and confectionery, so it’s been some good news for those with a sweet tooth.
And just in time for the summer months as well, the ONS reported a dip in the inflation rate for recreation and culture, sitting at 4.1% in the year to May which was a fall of 0.4% since April.
This could see some encouragement for consumers as we head into the typically warmer summer months, inviting more shoppers to make the effort to enjoy more time outdoors.
Kris Hamer, director of insight at the British Retail Consortium, said: “The country will breathe a sigh of relief as inflation hits the Bank of England’s target of 2% for the first time in almost three years, raising hopes of an interest rate cut for the 9.6million mortgage holders across the UK.
“Falling energy prices continue to be the main driver behind the fall in the headline rate however, a lower inflation rate in clothing and furniture also contributed.
“Food inflation fell for the fourteenth month in a row, and those with a sweet tooth will be happy to see that the price of chocolate and confectionery products fell on the month.
“Hitting the 2% target is welcome news, however, it is vital that inflationary progress is not taken for granted by the next government.
“Retailers are working hard to limit price increases for their customers, and the next administration must play their part in reducing cost pressures on retailers and the customers they serve.”
The figures mirror a wider trend across the whole grocery sector, as Kantar reported that grocery price inflation now sat at 2.3% for the 12 weeks to 9 June.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “There are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets.
“In May, we recorded the largest jump in the number of comfortable households since January 2023, rising by 2% on February 2024’s figure.
“Costs are falling in nearly one third of the grocery categories we track, including toilet tissues, butter and milk.”
