UK grocery inflation increased for the first time since March 2023, reaching 1.8 per cent in the four weeks to August 4, up from 1.6 per cent the previous month, according to research firm Kantar. This uptick in supermarket prices presents an early challenge for the new Labour government, with Chancellor of the Exchequer Rachel Reeves facing pressure to manage rising household bills amid soaring inflation. The Bank of England (BOE) recently cut interest rates for the first time since 2020, signalling potential further reductions. However, upcoming official data is expected to show rising inflation, which could influence policymakers' decisions on future rate cuts. Despite this recent increase, grocery inflation is returning to levels seen before the cost-of-living crisis, according to Kantar's Fraser McKevitt. Shoppers are turning to promotions to manage costs, with spending on deals up by 15 per cent. Meanwhile, competitive pricing among grocers has boosted sales at discounters Lidl and Aldi. J. Sainsbury Plc reported its largest year-on-year market share increase in over 27 years, rising 0.5 percentage points. This growth comes at the expense of Asda, which saw its market share decrease by 1.1 percentage points. Attribution: Bloomberg Subediting: M. S. Salama
