British shop prices fell slightly overall this month but food price inflation accelerated, according to a survey on Tuesday from the British Retail Consortium which warned price pressures are on the rise again.
Overall shop prices fell by 0.1 percent in annual terms, as they did in April, the BRC said, as non-food prices declined at a faster rate.
However, food prices were up 2.8 percent in May in annual terms, compared with a 2.6 percent rise in April.
Helen Dickinson, chief executive of the BRC, said retailers were now dealing with the cost of higher payroll taxes and an increase in the national minimum wage.
“It is no surprise that inflation is rearing its head once again,” Dickinson said, adding that a new packaging tax and new labourmarket laws could further increase costs.
Official last week showed Britain suffered a bigger-than-expected consumer price inflation surge in April, prompting investors to bet on the Bank of England slowing its already gradual pace of interest rate cuts.
The BoE has predicted that inflation will hit 3.7 percent by September.
