Overview

• Food inflation rose to 2.8% in May, marking a fourth consecutive monthly increase and up from 2.6% in April, according to the British Retail Consortium.
• Fresh food prices climbed 2.4% year-on-year in May, driven largely by a rise in wholesale beef costs due to tighter supply and strong demand.
• Retailers have absorbed an additional £5 billion in expenses from April’s higher employer National Insurance contributions and national living wage.
• Overall shop prices remained in deflation, down 0.1% year-on-year, supported by aggressive promotional campaigns across stores.
• Retailers warn that a planned £2 billion packaging tax and costs from the Employment Rights Bill later this year could prompt further consumer price increases.