Thanks for joining us. Ministers risk prolonging food inflation pain for shoppers, supermarket chiefs have warned, as retailers brace for a rise in wage costs and tax bills.
Shop price inflation fell to its lowest level since May 2022 in January, according to new figures from the British Retail Consortium (BRC), slipping from 4.3pc in December to 2.9pc.
It followed a slowdown in the pace of price rises for both groceries and non-food items, such as clothes and electronics.
Helen Dickinson, chief executive of the industry group, said: “Many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.”
However, retailers warned that ministers risked stoking the flames of inflation with unhelpful policies.
The BRC said progress on bringing bills down for shoppers “will likely be hampered by new cost pressures coming directly from the government”.
This includes an upcoming increase in the minimum wage, which will see low-paid workers handed a 10pc pay rise from £10.42 to £11.44 an hour from April.
At the same time, retailers are facing an above inflation rise in business rates. The government is also considering proposals that would stop retailers being able to charge for taking customers’ unwanted goods to be recycled. The BRC dubbed the plan “ill-conceived”.
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What happened overnight
Asian stocks stumbled as the court-ordered liquidation of property giant China Evergrande weighed on sentiment.
Uncertainty around how the court order to liquidate Evergrande Group will play out and its impact on the nation’s fragile property market is keeping investors on edge.
Hong Kong’s Hang Seng index shed 1.7pc, with the mainland properties index down 3pc. China stocks fell 0.7pc and were on course for a near 4pc drop for the month.
Tokyo’s key Nikkei index closed modestly higher supported by overnight Wall Street rallies, with traders’ focus shifting to corporate earnings.
The benchmark Nikkei 225 index added 0.1pc, or 38.92 points, to 36,065.86, while the broader Topix index ended down 0.1pc, or 2.55 points, at 2,526.93.
American and European shares surged on Monday, with the S&P 500 closing at a new record close and European shares hitting a two-year high, as markets slashed ambitious bets at the end of 2023 on interest rate cuts by the Federal Reserve and other central banks.
The Dow Jones Industrial Average rose 0.6pc to finish at 38,333.45, while the S&P 500 returned to record territory with a 0.8pc gain to 4,927.93. The tech-rich Nasdaq Composite index climbed 1.1 percent to 15,628.04.
The yield on benchmark 10-year Treasury bonds fell 8.6 basis points to 4.07pc.
