Rising grocery prices fail to dampen wine sales during Olympics

The British Retail Consortium (BRC) warned that further inflation could be expected as climate change damages harvests after unusually wet weather in England.

Extreme heat in other parts of the world has also destroyed crops which has reduced supply, pushing prices up.

Combined with rising geopolitical tensions, further inflationary pressures could be “lurking just over the horizon,” said Helen Dickinson of the BRC.

Overall inflation in the UK held at the Bank of England’s target rate of 2% in June, although economists expect July’s data to show a rise when it is released on Wednesday. This is partly because energy prices are not expected to have dropped as sharply this year compared to falls in 2023.

The Bank of England key interest rate was this month lowered to 5% from 5.25%, marking the first cut since the start of the pandemic in March 2020. It had been raising the interest rate in a bid to cool inflation, which had been running at record levels in recent years.

Kantar’s latest data also showed among Britain’s best-known supermarkets, Asda was rapidly losing its grip on market share.

Its share of the groceries market was down 1.1% compared with last year, while rivals such as Sainsbury’s recorded its largest year-on-year gain since July 1997.