UK retailers feel the pinch as the country heads for the upcoming election. Prices rose at the slowest pace in almost three years month, according to Reuters. While this is a welcome pause for consumers, who have been grappling with high prices since COVID, retailers are now concerned about growth prospects.
Annual shop price inflation slows to 0.2 per cent in June from 0.6 per cent in May. Prices for non-food goods slumped 1 per cent after a similar drop in May. This comes as food inflation slows for the 14th month in a row.
Retailers are also sceptical about increasing prices in times to come, as discretionary spending is slowly recovering in the country. The Bank of England is expected to cut interest rates in August as economic indicators align.
Prime Minister Rishi Sunak has been facing the heat over economic growth. However, he praised his party’s policies for bringing down inflation. At a parliamentary discussion, he said, ‘Since we last met, taxes have been cut by 900 pounds, state pension’s gone up, free childcare has been expanded, wages have risen for nine months in a row, Mr Speaker and just today inflation down again to 3.2 per cent. Our plan is working, and the conservatives are delivering a brighter future for Britain.’
Despite Sunak’s optimism, the opposition labour party and its leader, Keir Starmer, are also gaining momentum. Starmer recently had a different perspective on falling inflation. He said, ‘It is back where it was three years ago, but that doesn’t mean that prices are coming down, it doesn’t mean that mortgages are coming down, and if there’s one thing that’s been picked up on this campaign trail over and over again, it’s people being fed up with the government sort of saying, oh, you need to thank us now, we’re turning a page, everything’s fine.’