Inflation at close to zero as shops cut price on food

The fierce price war among supermarkets has continued to act as a drag on inflation, which has barely moved above zero this year. Britain’s inflation rate, as measured by the consumer price index, was unchanged last month at 0.3 per cent, according to the Office for National Statistics, disappointing economists who had forecast growth of 0.4 per cent. “The supermarket price war keeps going and going”, Alan Clarke at Scotiabank, said. “With Amazon Fresh now on the scene and a new boss at Asda with a mind for cutting, there is probably more mileage in this.” However, economists remain optimistic that inflation will gather pace in the second half of this year and into the next. “Sterling’s depreciation over the last nine months has begun to raise import prices, and retailers will soon reflect this in their pricing” Samuel Tobbs, chief UK economist at Pantheon Macroeconomics, said.

Source: The Times, 15th June

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