According to a report by the British newspaper The Guardian on October 27, the British Retail Association stated that inflation in store prices has reached its highest level in two and a half years. The association warned that retailers are struggling to contain rising prices for consumers, and "levees are beginning to break."
The association stated that in October, store prices increased by 2.1% year-on-year, a significant rise from the 1.4% seen in September. This indicates that retailers are beginning to pass on the rising costs of energy and food materials since the outbreak of the Middle East conflict.
According to the association, food inflation, which had remained low throughout the past year, rose by 2.9% in October compared to the same period of the previous year. Non-food inflation, including goods such as clothing and shoes, more than doubled in October, rising from 0.8% to 1.7%.
Brent crude oil prices have recently reached $117 per barrel, significantly higher than the average of $70 per barrel in the months before the attacks on Iran by the United States and Israel in February. Natural gas prices have also risen sharply, driving the UK’s consumer price index up to 3.5% last month.
Until this month, retailers had largely absorbed the increase in raw material costs, mainly to cope with weak consumer demand. Since this summer, British consumer confidence has plummeted, as people became more aware that the Middle East conflict was unlikely to end quickly.
It is expected that UK central bank officials will raise interest rates from 3.75% to 4% next week. If retail prices continue to rise, it is likely that the UK central bank will further raise interest rates in December or early next year.
"The past two years have seen retail businesses absorb a wave of soaring costs, and now the ‘dam’ is starting to break," said Helene Dickinson, CEO of the UK Retail Consortium. She said that while retailers heavily discounted goods in anticipation of Halloween shoppers, supermarkets are now unable to further curb price increases for canned goods and packaged foodstuffs on shelves."
It is expected that the British Chancellor of the Exchequer will face tremendous pressure from members of his own party, who are concerned that high living costs are harming the people in many constituencies.
Ruth Patrick, a professor of sociology and public policy at the University of Glasgow, discussed the impact of living cost pressures on low-income families in a report. The report based on a long-term study, which showed that high gasoline and diesel prices are affecting families who need to drive to school or medical appointments for their children with disabilities, as well as workers who commute by car.
Patrick leads an online project called “Changing Realities,” which tracks 100 low-income families. She said that in many places, gasoline prices exceed £1.75 per liter, and diesel prices often exceed £2 per liter (about 17.76 yuan), making the work uneconomical.
She said that in the past month, nearly three-quarters (73%) of the participants in the project have shopped on the shelves with discounted products. 62% of them changed the foods they purchased, and 63% of them kept their heating turned off even when they felt cold.
