UK Shop Prices See Slight Drop in June, but Food Inflation Remains High

The British Retail Consortium (BRC) has reported that shop prices in the UK rose by 8.4% in June compared to the same month in the previous year, down from a 9.0% annual increase in May, which was the highest rate since the BRC's records began in 2005.

Food prices rose by 14.6%, but the increase slowed for a second month in a row.

Retailers cut prices on staples such as milk, cheese, and eggs, and clothing and electrical goods also saw falling prices.

The BRC's chief executive, Helen Dickinson, expects food inflation to drop to single digits later this year.

Tesco, the UK's largest retailer, has also said that food inflation has peaked.

The Bank of England raised borrowing costs to 5% last week as it continues to fight against inflation that has fallen more slowly than expected.

However, most households are still likely to prioritize essential needs over discretionary spending for the rest of the year.