Record clothing and footwear price rises have been a major contributor to consumer price inflation (CPI) remaining static at 3.1%, according to the Office of National Statistics (ONS).
The ONS said that although the figure remained unchanged, putting it above the Bank of England’s 2% target for the tenth consecutive month, there has been significant upward and downward pressures on CPI annual inflation. The Retail Prices Index (RPI) fell back marginally from 4.7% in August to 4.6% in September.
Clothing and footwear prices rose by 6.4%, a record for August to September. The largest effect came from women’s outerwear, where prices rose sharply for the autumn season. Meanwhile, the largest downward pressures came from a variety of transport costs, including air travel and fuel.
The ONS added these had also been the main factors affecting RPI, which the British Retail Consortium (BRC) said has remained much higher than most retailers had anticipated. The BRC warned that business rates will be significantly higher than retailers have budgeted for unless the Government takes action. Under the current system, the increase in commercial property prices will be introduced in April.
BRC director general Stephen Robertson has written to Eric Pickles, the Secretary of State for Communities and Local Government, urging him to find other ways of calculating the next increase, which the department does have the power to do.
“No one seriously expected inflation to fall so stubbornly slowly from the highs of January and February. As recently as this spring most forecasters expected RPI to be significantly lower by now. Few retailers have budgeted for the scale of business rates that may now result.
“With the Government set to announce big public spending cuts in little more than a week, this business rates battering can only undermine retailers’ proven ability to maintain and create alternative jobs.”