The British Retail Consortium has warned that imported inflation is ‘inevitable’ despite another month of shop price deflation – albeit at a slower rate.
According to the BRC’s latest figures, overall shop prices reported deflation of 1.7% in October from the 1.8% decline in September, slightly behind the 3-month average of -1.8%.
Non-food deflation remained unchanged at 2.1% for the second consecutive month.
The BRC said that shop price deflation is likely to move closer to zero at the turn of the year and could potentially move into inflationary territory at some point during the first half of 2017.
Helen Dickinson OBE, chief executive, British Retail Consortium, said: “While we know that the devaluation of sterling since the Brexit vote is stoking inflationary pressures, the good news for consumers is that retailers have been successful in managing this to date and there is still no impact visible in shop prices.
“However, it is inevitable that imported inflation will begin to make its mark and we would expect to start to see this effect coming through in the first quarter of 2017.”