Inflation is continuing its upward creep according to the latest figures published by the Office of National Statistics. The CPI annual inflation figures show that it rose to 3.3% in November, up from 3.2% the month before. It had previously remained static at 3.1% for both September and August.
For the October to November period a number of sectors showed record rises. Food and alcoholic drinks prices rose by a record 1.6% for the October to November period, compared to a 0.6% rise a year ago. Clothing and footwear also rose, up by a record breaking 2% for the period, and furniture and household equipment were also affected.
For the year to November RPI annual inflation was 4.7%, up from 4.5% in October. The effect of inflation will be worrying retailers who face a hike in their costs across the board including labour, raw materials and the VAT rise post Christmas.
A Christmas Trading Snapshot survey published by the British Retail Consortium earlier this week showed that a third of retailers expect Christmas sales to be higher than last year, a third to be static, and a third expect a fall.
The survey showed that 71% of retailers believe the VAT rise is causing customers to bring forward purchases with more than eight out of ten expecting it to hit sales in January.
Although BRC director general Stephen Robertson said it was encouraging to see the majority of retailers believing Christmas will be as good, or better than last year, the industry needed such a rise.
“Considering inflation is now at 3.3%, growth of anything less than that would be a real terms fall,” he said.