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Food inflation fell 1.6% in the four weeks to July 7, down from 2.1%, with toilet tissues, dog food and butter accounting for the largest fall in prices over the period.
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However, prices have continued to rise for items including vitamins, supplements, fruit juices and deodorants.
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But overall, falling price inflation helped fuel sales of branded products by 3.6%, outpacing grocery stores’ own-label products, which grew at 2.7%.
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Easing price growth also coincided with the fastest rise in monthly footfall so far in 2024.
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People made 2% more trips to the supermarket over the four-week period than they did a year earlier, Kantar said.
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And, of course, the men’s Euros football tournament helped fuel purchases of beers crisps and snacks on match days though low alcohol beer sales soared on weekdays as Britons celebrated in relative moderation.
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Fraser McKevitt, head of retail and consumer insight at Kantar, said:
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England’s hopes might have been dashed on Sunday, but there was still some cause for celebration in the grocery industry.
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Football fans drove beer sales up by an average of 13% on the days that the England men’s team played, compared with the same day during the previous week.
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Sales of crisps and snacks also got a boost, up by 5% compared with the month before.
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With many matches played on “school nights”, though, some Britons chose moderation. Spending on no and low-alcohol beer soared by 38% on matchdays.
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Good morning, and welcome to our live coverage of business, economics and financial markets.
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The long wait for US interest rate cuts could soon be over.
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Federal Reserve chair Jerome Powell has dropped hints that the central bank will not need to see inflation hit its 2% target before cutting interest rates.
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Speaking at the Economic Club of Washington DC, Powell said:
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The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%.
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Instead, he explained that policymakers are looking for “greater confidence” that price inflation is striding towards that figure:
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What increases that confidence in that is more good inflation data, and lately here we have been getting some of that.
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Traders are currently betting on at least two rate cuts before the end of 2024, starting in September. That could result in a drop in the main federal funds rate, from its current range of 5.25% to 5.50%.
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Fed policy makers are next set to meet on July 30-31, though they are expected to hold interest rates steady.
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The agenda
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11:45am BST: Bank of America Q2 , Morgan Stanley Q2
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1:30pm BST: US retail sales for June
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Important Events
Julia Korewe
The water regulator in England and Wales is taking action against four more water companies, including Severn Trent and United Utilities, over sewage spills, just days after they were accused of “disrespecting” customers over recent water price increases.
Ofwat said it had issued formal notice. Dwy Cymru Welsh Water, Hafren Dyfdwy, Severn Trent and United Utilities were asked to provide evidence for an inquiry into companies’ wastewater management in England and Wales.
Regulators looked at data on the companies’ environmental performance and the frequency of storm spills, which raised “concerns that the companies may not be meeting their obligations to protect the environment and minimize pollution,” they said.
This means that Ofwat is now taking enforcement action against all 11 water and sewerage companies in England and Wales over sewage contamination. Once we have completed our full investigation, we will make our findings public and, where appropriate, take action for any breach of our legal obligations.
Investigations into Anglian Water, Northumbrian Water, South West Water, Thames Water, Wessex Water and Yorkshire Water began two years ago and are still ongoing. Southern Water remains under enforcement watch after being fined a record £126 million in 2019 for “shocking” failures at its wastewater treatment plants that led to pollution of rivers and beaches in the south of England.
Please see here for the detail:
Kantar: UK food inflation falls to 1.6%, lowest in nearly three years
Food inflation fell to its lowest level since September 2021, according to the latest data from market research firm Kantar.
Food inflation fell from 2.1% to 1.6% in the four weeks to July 7, with toilet paper, dog food and butter seeing the biggest price falls over that period.
But the prices of products like vitamins, supplements, fruit juices and deodorants continue to rise.
But overall, lower inflation helped branded product sales grow 3.6 percent, outpacing grocers’ own-brand sales, which rose 2.7 percent.
The moderation in price increases coincided with the fastest increase in monthly foot traffic so far in 2024.
Kantar said people made 2% more trips to supermarkets in the last four weeks than they did a year ago.
And of course, the men’s Euro soccer tournament helped drive buying of beer, crisps and snacks on match days, although sales of low-alcohol beers soared during the week as Brits celebrated relatively subduedly.
Fraser McKevitt, head of retail and consumer insights at Kantar, said:
England’s hopes may have been dashed on Sunday, but there was still reason to celebrate in the grocery industry.
Thanks to football fans, beer sales increased by an average of 13% on days when the England men’s team played, compared to the same day the previous week.
Sales of potato chips and snack foods also increased, up 5% from the previous month.
But with many games taking place on “school days”, some Brits are opting for moderation, with spending on no- and low-alcohol beer soaring by 38% on match days.
European markets have opened with all major stock indexes falling this morning.
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Europe’s STOXX 600 fell 0.5%
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Germany’s DAX index fell 0.6%
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Britain’s FTSE 100 index fell 0.4%
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France’s CAC 40 fell 0.6%
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Spain’s IBEX falls 0.7%
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The Euro Stoxx index fell 0.6%.
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Eurozone blue chips fall 0.6%
Introduction: Fed Chairman Powell hints interest rates could be cut before US inflation hits target
Good morning and welcome to our live coverage of business, economy and financial markets.
The long wait for US interest rate cuts may soon be over.
Federal Reserve Chairman Jerome Powell has suggested that inflation does not need to reach its 2% target before the central bank will cut interest rates.
“We’re not going to let the economy slow down,” Powell said at the Economic Club of Washington, D.C.
What that means is that if we wait until inflation falls to 2%, we’ve probably waited too long, because the monetary tightening, or the level of tightening, that we have in place now is still having the effect of pushing inflation below 2%.
Instead, he explained, policymakers want “greater confidence” that price growth is moving toward that figure.
What would increase that confidence would be better inflation data, and we’ve had some of that recently.
Traders now expect at least two more rate cuts starting in September through the end of 2024. As a result, the key federal funds rate could fall from its current range of 5.25% to 5.50%.
The next Fed policy meeting is scheduled for July 30-31, when interest rates are expected to remain unchanged.
agenda
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11:45am BST: Bank of America Q2, Morgan Stanley Q2
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1:30pm BST: U.S. Retail Sales in June
