Shop price inflation increased to 2.9% in June, up from 2.3% in May according to figures from The British Retail Consortium-Nielsen Shop Price Index.
Non-food inflation rose to 1.3% in June from 0.8% the month before.The British Retail Consortium said that rising commodity costs along with the weak pound had pushed up prices.
BRC director general Stephen Robertson said: “Household budgets are under pressure. Real disposable incomes have dropped the most in 34 years but increasing petrol and energy bills plus low wage rises are the main causes.
“Shop prices are going up much more slowly than the wider Consumer Prices Index. Overall shop price inflation is being driven by surging world commodity prices, the effect of the weak pound on import costs and higher VAT – all beyond retailers’ control.
“Considering January’s VAT rise, non-food inflation is still very low.
“The latest bout of retail administrations shows how weak consumer spending is.
“Retailers are using discounts to generate sales at the expense of margins. Sales have started earlier this year, especially in clothing and footwear, where prices are actually cheaper than a year ago.”