Prices in British shops fell less sharply this month, according to a survey by the British Retail Consortium (BRC) released on Tuesday.
The survey suggested that consumers could face renewed pressure on their spending power.
The annual shop price deflation of 0.6% in the 12 months to November followed a 0.8% drop recorded previously, in the 12 months to October, the BRC said.
Its measure of shop price inflation dropped between May 2023 and July 2024, after which it fell further into deflation, until now.
The chief executive of the BRC Helen Dickinson said, “With significant price pressures on the horizon, November’s figures may signal the end of falling inflation.”
Official figures last week shows consumer price inflation rose 2.3% in October, which largely reflected a surge in household energy prices.
The Bank of England (BoE) this month cut interest rates to 4.75% – down from 5%.
However, it added that it would only implement further cuts gradually.
On Monday, BoE Deputy Governor Clare Lombardelli expressed concern that prices might grow faster than had been previously forecast.
Dickinson said prices would increase as stores pass on higher staffing costs, including in finance minister Rachel Reeves’ budget last month.
On 30 October, Reeves announced a £25 billion rise in social security contributions by employers alongside a 6.7% uplift in the minimum wage.
The BRC survey showed food inflation fell 1.8% from 1.9% in October.
Prices of non-food items fell by 1.8% – a less severe drop than October’s 2.1% fall.
A separate survey from British supermarket Asda on Monday said a drop in households’ disposable income could subdue Christmas spending.
Read More: UK Shop Prices Fall Faster But Retailers Warn Of Budget Risks – BRC
