Industry Commentary On Inflation Data

The ONS has published the latest consumer price inflation data, revealing that the figure has reached a 40-year high of 9%, as energy bills soar.

Key points:

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 7.8% in the 12 months to April 2022, up from 6.2% in March.

• The largest upward contributions to the annual CPIH inflation rate in April 2022 came from housing and household services (2.76 percentage points, principally from electricity, gas and other fuels, and owner occupiers' housing costs) and transport (1.47 percentage points, principally from motor fuels and second-hand cars).

• On a monthly basis, CPIH rose by 2.1% in April 2022, compared with a rise of 0.7% in April 2021.

• The largest upward contributions to the change in the CPIH 12-month inflation rate between March and April 2022 came from housing and household services (1.27 percentage points), restaurants and hotels (0.11 percentage points), and recreation and culture (0.10 percentage points), with the largest partially offsetting downward contribution from clothing and footwear (0.09 percentage points)
  
  
• The Consumer Prices Index (CPI) rose by 9.0% in the 12 months to April 2022, up from 7.0% in March.
  
  
• On a monthly basis, CPI rose by 2.5% in April 2022, compared with a rise of 0.6% in April 2021.

Commentary:

Responding to the latest CPI inflation figures which shows headline inflation at 9.0%, and food inflation at 6.7%, Helen Dickinson, Chief Executive of the British Retail Consortium, said:

“Inflationary pressures continue to impact businesses as well as households, with soaring energy prices further driving up the Consumer Price Index. These higher energy prices, along with a tight labour market, and the huge costs of moving goods around, are impacting all retailers. Food production has been particularly hard hit, with historically high global food prices, rising costs of animal feed, and disruption in supplies as a result of the Ukraine war.

“The Bank of England now expects inflation to top 10% by the end of the year, as many of the rising costs filter down into prices. Retailers are doing their bit to protect consumers by expanding their value ranges and doing all they can to keep the price of essentials down. This can be seen in the BRC’s Shop Price Index, which tracks the price of basic goods, which showed a slower rise in the price of essential foods and other products than the inflation levels seen in the broader CPI measure.”

Rain Newton-Smith, CBI Chief Economist, said:

“Inflation was always likely to hit hard in April given the energy price cap increase. Looking ahead, inflation is likely to stay high, with a resulting historic squeeze in households’ incomes and a tough trading environment for businesses.

“It is critical the government explores options to help people facing real hardship now, and support cashflow for vulnerable firms. Stimulating business investment is also crucial, to both plug the near-term gap in growth and to shore up the economy’s potential to withstand future shocks. Turning good intentions on a permanent investment deduction into a firm commitment, setting out an infrastructure roadmap and publishing a digital strategy are steps which can be taken without delay.”

Source : ONS, BRC, CBI

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.