Price rises hit Christmas shopping in cost of living squeeze

·2 min read
Oxford Street shopping district is busier than ever as shoppers come to the West End in their droves and retail business looks set to bounce back well during the run up to Christmas despite concerns over supply shortages on 22nd November 2021 in London, United Kingdom. Many people are wearing face masks in crowded places like this but they are no longer mandatory, while government advice suggests that it is advised to wear a face covering in busy public places inside and on transport, many people are still wearing them outside. (photo by Mike Kemp/In Pictures via Getty Images)
Shoppers may see a price squeeze in the UK this year. Photo: Mike Kemp/In Pictures via Getty

Prices crept up in November for the first time since May 2019, as retailers digested higher costs associated with supply chain tension and labour market problems. 

The British Retail Consortium's (BRC) monthly monitor showed shop prices grew 0.3% year-on-year in November compared to October’s decrease of 0.4%. 

This was above the 12- and six-month average price decreases of 1.2% and 0.6%, respectively. 

Food price increases were in focus, hitting the the highest inflation rate since November 2020. They accelerated to 1.1% in November up from 0.5% in October. This was above the 12- and six-month average price growth rates, which were both at 0.1%.

Watch: What is inflation and why is it important?

Fresh food inflation also accelerated to 1.2% in November up from 0.3% in October, above the 12- and six-month average price growth rates of -0.6% and -0.2%, respectively. This is the highest inflation rate since August 2019.

"The impact of labour shortages, rising commodity prices and transportation costs have now very clearly taken their hold on consumer prices," said Helen Dickinson, CEO of the BRC.

"With food prices rising, and particularly fresh food — which saw the highest inflation since 2019 — we may find some of our Christmas shopping a little more expensive this year."

Read more: UK service sector continues to grow as costs rise at record pace

Food was also affected by a rise in global food costs where certain staples, such as vegetable oil, have doubled in price in the past two years.

Alongside this, non-food deflation slowed to 0.1% in November compared to the decline of 1.0% in October. 

This is a slower rate of decline than the 12- and six-month average price declines of 2.0% and 1.0%, respectively. 

The barometer comes following data showing that half of businesses expect to raise the price of their goods in the coming months — up one from 49% and a record high.

Nine of the 12 UK regions and nations registered a decrease in business confidence in November. However, Wales saw a 14 point increase to 37% and the South East was up 13 points to 34%, experiencing significant increases in confidence. The East of England also registered an improvement of five points to 38%.

Watch: How to save money on a low income

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting