UK grocer sees Brexit induced inflation easing

Bloomberg

With Bank of England policy makers’ voting for a first interest-rate increase in a decade, Wm Morrison Supermarkets Plc is signalling that the UK’s Brexit-induced jump in food prices is already easing.
“The rate of inflation fell as we went through the third quarter,” Trevor Strain, chief financial officer of the UK’s fourth-largest grocer, said. “In our business we expect it to continue to taper down.”
UK inflation climbed to its highest rate in more than five years in September, driven by food prices, which rose 0.8 percent in a month, according to the Office for National Statistics. The UK imports almost half its food and the fall in sterling that followed the Brexit vote pushed up costs. Food prices in UK supermarkets have risen continually for the past year, according to researcher Kantar Worldpanel.
A slowdown in the rate of price increases would alleviate some of the pressure on Britain’s consumers and give retailers more reasons to be cheerful as they approach the crucial holiday shopping season. Apparel chain Next Plc struck a downbeat note. Chief Executive Officer Simon Wolfson said consumer behaviour remained subdued and he expected that trend to persist into the Christmas period.
Beyond the holiday season, Morrison is lobbying the UK government on what the retail industry needs from Brexit negotiations, amid a lack of clarity emerging from the talks thus far.
Retailers are struggling to plan for the possibility of the UK leaving the European Union without a deal, and as that risk increases, executives are breaking their silence on the issue. With the British Retail Consortium warning of backlogs at the country’s ports if the UK leaves the EU without a deal, executives are breaking their silence on Brexit.
“It’s a very important subject for the industry and we continue to make ourselves heard,” Morrison CEO David Potts said.