ONS data shows that annual food price inflation in the UK (ONS measure L55P) fell from -0.5% in November 2020 to -1.4% in December. This indicates that prices are falling, year-on-year.
The fall in overall pricing was fairly broad-based, with many categories affected, although the biggest contributions came from vegetables and meats.
This may reflect very aggressive price competition by retailers in the run-up to Christmas. Note, however, that shoppers remain fearful of food price rises, in IGD research.
ONS notes, that most of its price survey data was gathered early in December and therefore may not show the full effect of any supply shortages later in the month.
“All items” inflation (ONS measure L55O) strengthened in the month, moving from +0.6% in November to +0.8% in December. The largest contributions to this increase came from transport, culture and clothing.
Source: ONS, January 2021
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