The Office for National Statistics (ONS) has revealed that the largest offsetting upward contribution to monthly changes to CPIH and CPI annual rates came from the food category.
The Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August. On a monthly basis, CPI did not change much in September 2024, down from a rise of 0.5% in September 2023.
Food and drink prices rose by 1.8% in the year to September 2024, up from 1.3% in August 2024.
ONS said that the annual inflation rate for food and drink had strengthened for the first time since March 2023, finding upward contributions to the change in the annual rate of inflation in milk, cheese and eggs, as well as fruit.
It said that the only class with a downward contribution was bread and cereals, while the other classes were “little changed”.
The fall in the annual Consumer Price Index including owner occupiers’ housing costs (CPIH) inflation rate in September 2024 saw downward contributions from six divisions, with ONS highlighting food and drink in particular.
BRC suggests Chancellor raises business taxes
Kris Hamer, director of insight of the British Retail Consortium (BRC), said: “Inflation was down on August, dropping below the Bank of England’s 2% target for the first time in over three years. This was driven by lower energy costs, as well as easing inflation of clothing & footwear. While food inflation edged up slightly due to poorer harvests, prices of some sweeter items including chocolate and sugar fell in price on the month.
“The September CPI will determine next April’s increase to business rates, meaning the industry faces paying an extra £140 million. For too long, the gradual increases to business rates have been contributing to the decline of our high streets and town centres, damaging investment and preventing the creation of new shops and jobs.
“This effect could be compounded if other business taxes are increased at the Budget. The Chancellor should introduce a Retail Rates Corrector – a 20% downward adjustment in business rates paid on all retail premises – to redress the imbalance that sees retailers paying a higher proportion of their profits in taxes of almost any industry.”
