UK shop prices fall again ahead of Bank of England meeting - BRC

FILE PHOTO: A man looks through the window of a craft shop in Norwich, Britain, March 20, 2018. Picture taken March 20, 2018. REUTERS/Hannah McKay/File Photo

LONDON, (Reuters) - British shop prices dropped again in April, according to a survey on Wednesday that suggested inflation pressures remain in check ahead of a Bank of England interest rate decision next week.

Overall shop prices fell 1.0 percent year-on-year in April, matching March’s pace of decline, which had been the fastest in more than a year, the British Retail Consortium (BRC) said.

Ongoing signs of muted cost pressures will be of interest to Bank of England officials, who are sizing up the outlook for inflation ahead of their policy decision due next Thursday.

However, the figure masked a widening gap between rising prices for food and falling prices for other goods.

“Higher global commodity prices than last year pushed food price inflation upwards in April,” BRC chief executive Helen Dickinson said.

“On the other hand, non-food prices sunk further into deflation as retailers continue to respond to the squeeze on households’ discretionary spending by offering low and falling prices.”

Official data last month showed British inflation unexpectedly cooled to a one-year low of 2.5 percent in March.

BoE Governor Mark Carney later highlighted “mixed” economic data, causing many investors to shelve their bets for an interest rate increase this month.

Reporting by Andy Bruce, editing by David Milliken