Shop prices in the UK edged down slightly in May, though food inflation picked up pace, according to the latest survey from the British Retail Consortium (BRC). The BRC reported a 0.1%

annual decline in overall shop prices—the same rate of decrease seen in April—driven largely by a faster drop in non-food prices.

In contrast, food prices rose by 2.8% compared to May last year, up from a 2.6% increase in April, signaling a renewed rise in cost pressures.

Helen Dickinson, Chief Executive of the BRC, noted that retailers are facing added financial strain due to higher payroll taxes and a recent increase in the national minimum wage.

“It's no surprise that inflation is starting to rise again,” Dickinson said, warning that upcoming policies such as a packaging tax and new labour laws could further push up costs.

The warning follows official data released last week showing UK consumer price inflation rose more sharply than expected in April. This has led investors to anticipate a slower pace of interest rate cuts by the Bank of England, which expects inflation to climb to 3.7% by September. Photo by A P Monblatl, Wikimedia commons.