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The final months of 2024 saw a decline in retail prices

January, 10, 2025-04:32

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The final months of 2024 saw a decline in retail prices:

As the final months of 2024 saw a decline in retail prices, experts predict a shift in 2025, with prices expected to rise again. The British Retail Consortium (BRC) warns that new budget measures will increase costs for UK retailers by around £7 billion this year, contributing to anticipated price hikes. Key factors influencing this include:

1. National Living Wage Increase: Set to rise to £12.21 per hour from April, which will significantly increase wage bills for retailers.
2. Increased Employers' National Insurance Rates: This change will raise the cost of employing workers.
3. Reduced Business Rates Relief: Businesses will receive less relief on property taxes, adding to their financial strain.

Helen Dickinson, CEO of the BRC, forecasts a 4.2% rise in food prices later in the year, and she emphasized the need for the government to prevent further hikes in business rates, which could exacerbate the situation.

Despite these predictions, December saw some relief in terms of price reductions. Shop prices fell by 1%, food inflation remained steady at 1.8%, and non-food prices decreased by 2.4%. Retailers had already adjusted their pricing strategies ahead of key sales events like Black Friday, in response to earlier weaker demand in the year.

These mixed trends suggest that while there was a brief period of price relief, the coming months will likely bring inflationary pressures due to the rising costs retailers are facing.