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UK food prices push up shop price inflation for first time in nearly a year - REUTERS
LONDON (Reuters) -British food prices accelerated by the most since March 2024 in June, pushing up overall shop prices rose for the first time in nearly a year, according to a survey on Tuesday from a retail industry group which warned price pressures may rise again.
Food prices jumped by 3.7% compared with June last year, speeding up from a 2.8% rise in May, the British Retail Consortium said.
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Prices of fresh produce such as meat were impacted by high wholesale prices and by more expensive labour costs for employers, the BRC said.
British finance minister Rachel Reeves increased social security contributions paid by employers starting in April.
Overall shop prices in June rose for the first time since July last year, increasing by 0.4% in annual terms after a 0.1% fall in May.
"Rising prices could become a concern if consumers' willingness to spend declines later in the year," Mike Watkins, head of retailer and business insight at NielsenIQ, which publishes the data with the BRC said.
Britain's headline rate of inflation slowed to 3.4% in May, but the Bank of England expects it will reach around 3.7% in September, nearly double its 2% target against a backdrop of higher labour costs and rising household bills.
The central bank held interest rates at 4.25% in June and investors are pricing in two more quarter-point rate cuts by the end of 2025.
The BRC data was based on prices collected between June 1 and June 7.
(Reporting by Suban Abdulla)
