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UK shop prices fell for the second consecutive month in September and registered the lowest rate in more than three years, according to data that suggests household finances are improving after a long period of high inflation.
Shop prices fell by an annual rate of 0.6 per cent in September, down from a 0.3 per cent contraction in the previous month and the lowest rate since August 2021, data published by the British Retail Consortium showed on Tuesday.
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The figures, which provide early indications of price pressures ahead of the official monthly inflation data published on October 16, show how the cost of living crisis, which hit millions of households, is finally receding.
Shop price inflation hit a record 9 per cent in May last year, following a spike in energy and food prices triggered by Russia’s invasion of Ukraine.
Helen Dickinson, chief executive of the BRC, said: “September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation.”
She added that the deflation “was driven by non-food, with furniture and clothing showing the biggest drops in inflation as retailers tried to entice shoppers back”.
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Non-food prices were down by an annual rate of 2.1 per cent in September, accelerating the 1.5 per cent fall in the preceding month and marking the lowest rate since March 2021.
Food inflation edged up to 2.3 per cent in September from 2 per cent in the previous month, however, as poor harvests in key producing regions led to higher prices for cooking oils and sugary products, according to the BRC. Last month, the UN Food and Agriculture Organization highlighted a rise in palm oil prices linked low output in Indonesia.
The official UK rate of inflation, which includes energy and services, was 2.2 per cent in August, unchanged from July and up from 2 per cent in the previous two months. Economists expect inflation to rise further to 2.5 per cent by the end of 2024 as energy prices fall less year on year.
BRC added that geopolitical tensions could further push up prices. “Easing price inflation will certainly be welcomed by consumers, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend,” said Dickinson.
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The tropical island of Hainan in southern China has long been a place for dreamers. The white beaches, clean air and temperate climates have attracted waves of migrants from the north of the country.
But it has also seen those dreams turn into nightmares. In 1993, Hainan became the site of China’s first property crisis in modern history, following a construction boom catering to the influx of new residents. Real estate prices cratered and 95 per cent of developers in the capital Haikou collapsed after Beijing raised interest rates.
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While today’s property crisis in China is not concentrated in Hainan, there is evidence of the national trend and challenges ahead for policymakers. Prices of existing homes in 25 large cities around China have fallen by 25 to 30 per cent from a peak in July 2021, according to data from the Beike Research Institute cited by Nomura. Another problem is the glut of unfinished pre-sold homes, particularly in low-tier cities where money has run out to complete the projects. Nomura economists estimate that there are 20mn units of pre-sold homes that have not been delivered on time due to a funding gap that is equivalent to Rmb3tn.
Driving through Hainan brings life to these numbers. The island is scattered with unfinished construction projects conceived at a time when the country’s growth appeared unassailable. The most dramatic is Ocean Flower Island, an artificial island shaped like an orchid in Danzhou City that was a flagship project of the collapsed property group Evergrande, comprising a theme park, shopping plaza, wedding venue, luxury villas and a “fairytale world”. Evergrande once envisaged it would require Rmb160bn ($22bn) of investment. Today the 800ha project stands very far from complete and on the day I was there, there was only a slow trickle of visitors.
The project tells the story of the worst excesses of China’s past exuberant economic growth, and a cautionary tale as Beijing tries to bring back vigour to the property market with stimulus measures. When I visited the resort last month, a typhoon had just wreaked havoc in the north of Hainan. Even without the weather disruption, it was clear the park did not attract many visitors. The orchid-shaped wedding venue was coated in dust, the movie studio seemed inactive and the fairytale world was unfinished. Staff in empty stores reacted with surprise when a visitor arrived.
Evergrande started construction on the resort in 2012. Danzhou officials, hoping that the resort could turn the city into a tourist hub to rival Sanya in the south, rubber-stamped the plan, allowing sand dredged from the sea to be poured into the project in violation of environmental and building regulations. Signs proclaiming “consumer confidence in Hainan” dotted around the resort hold a reminder of initial hopes.
The project was caught up in a broader anti-corruption purge in China. The senior Hainan politician Zhang Qi who approved the project was convicted of corruption in 2020 and two years later, authorities ordered its partial demolition. Regulators fined Evergrande’s founder Hui Ka Yan in March and banned him from the securities market for life after accusing him and the company of inflating revenues by almost $80bn over 2019 and 2020. Reuters reported this month that he had been moved to a special detention centre in Shenzhen.
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Even though the theme park is operational, much of the project has been abandoned, including a network of luxury villas where workers left in such a hurry that hard hats, construction equipment and barrels of paint were still scattered around.
China is no longer the same place that gave rise to Ocean Flower Island. It is unimaginable that today, one of the country’s richest men could build such an opulent project in his glory, bulldozing through red tape. The challenge now is reinjecting confidence into the property market, while making the economy less dependent on property. Hainan encapsulates both of those challenges.
Beijing last week unleashed a series of stimulus measures and economists expect more, perhaps by becoming a builder of last resort for unfinished projects. Meanwhile, Hainan is trying to make its future less dependent on property, launching visa-free travel schemes and pitching itself as a duty-free shopping haven and medical tourism destination. As China looks set to launch stimulus measures to bolster consumption and property, Hainan will be again a place to watch — this time as a barometer of any upturn.
Martin Wolf (Opinion, September 25) makes some astute observations about the EU and the regulatory effects it has on the technology sector. Arguably, this is a self-induced regulatory purgatory with significant negative consequences for growth and prosperity.
This is best demonstrated by regulations around artificial intelligence introduced by the Digital Markets Act — described by one commentator as helping to ensure the bloc is confined to the digital stone age. The geostrategic economic effects that are now in play will further hinder the EU’s competitiveness in all things technology related, with China, the US and, dare I say it, the UK being more agile and fleet of foot.
Until such time the EU recognises that it is within its own gift to reduce the regulatory burden on itself, it will increasingly become less relevant to its citizens and member states. Is this another Brexit dividend in the making?
A WETHERSPOONS pub had made the shortlist for the UK’s best pubs.
The Savoy in Swindon has been shortlisted in The Campaign for Real Ale’s (CAMRA’s) Good Beer Guide 2025.
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The Savoy has been named one of the UK’s best pubsCredit: Wetherspoons
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CAMRA praised the Wetherspoons for its long barCredit: Wetherspoons
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The pub converted the ground floor of an old cinemaCredit: Wetherspoons
The annual guide looks at thousands of pubs across the UK, with hundreds making the shortlist.
And the Swindon Wetherspoons has made the shortlist.
Also the oldest Wetherspoons in Swindon, The Savoy is in a former cinema built in the mid 1930s.
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The ‘super cinema’ seated as many as 2,000 people, with showings including the “best films across Britain and America” as well as stage shows and cinema clubs.
Read more on Wetherspoons
The Art Deco cinema sadly closed in 1991, before being converted to the Wetherspoons under the same name in 1996.
Not many of the original cinema features have remained in tact.
The pretty exterior has been restored, with the large billboards and double doors on the front.
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Only the ground floor remains, although the pub has beautiful curved bookcases lining the main drinking area as well as vintage movie posters on the walls.
And like most Wetherspoons, it also has arcade machines and the classic Spoons carpet.
According to CAMRA: “The long bar has a very large selection of well-kept beers.
One of the UK’s prettiest Wetherspoons is in an up-and-coming seaside town
“The atmosphere is friendly and it is close to theatre, cinema, restaurants and shopping.”
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It’s ranked highly with previous punters too, with many giving it five stars for great service as well as being cosy and spacious.
One said: “The food was excellent one of the best Wetherspoons I have been to.”
A second wrote: “One of the better Wetherspoon spots! The staff are exceptional and truly deserve 5 stars for their service.”
Someone else agreed: “This is a great Wetherspoons, it’s in an old cinema and has loads of character.”
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Another simply said it was their “favourite Swindon pub”.
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Inside is the classic Wetherspoons carpet as well as vintage movie posters and bookcasesCredit: Wetherspoons
It’s not the only amazing Wetherspoons pub to visit in the UK.
FREE refills – Buy a £1.50 tea, coffee or hot chocolate and you can get free refills. The deal is available all day, every day.
Check a map – Prices can vary from one location the next, even those close to each other.
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So if you’re planning a pint at a Spoons, it’s worth popping in nearby pubs to see if you’re settling in at the cheapest.
Choose your day – Each night the pub chain runs certain food theme nights.
For instance, every Thursday night is curry club, where diners can get a main meal and a drink for a set price cheaper than usual.
Pick-up vouchers – Students can often pick up voucher books in their local near universities, which offer discounts on food and drink, so keep your eyes peeled.
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Get appy – The Wetherspoons app allows you to order and pay for your drink and food from your table – but you don’t need to be in the pub to use it.
Taking full advantage of this, cheeky customers have used social media to ask their friends and family to order them drinks. The app is free to download on the App Store or Google Play.
Check the date – Every year, Spoons holds its Tax Equality Day to highlight the benefits of a permanently reduced tax bill for the pub industry.
It usually takes place in September, and last year it fell on Thursday, September 14.
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As well as its 12-day Real Ale Festival every Autumn, Wetherspoons also holds a Spring Festival.
We have heard much about the public finances, and how it’s “unfair” to burden future generations with the costs of the pandemic. However, is this a Treasury myth or fallacy? Millions of taxpayers alive today had to pay for the cost of war loans for the second world war. So is it fair to make them pay for the pandemic as well (Report, September 28)?
And if pandemics only occur once every 100 years or so, should there not be some adjustment to public sector borrowing to reflect this? Perhaps using some form of long-dated “pandemic bonds”?
In addition, the NHS has more than£60bn set aside for claims against it.
A small fraction of this would pay the winter fuel allowance for the entire parliament — and save the NHS money, by reducing winter hospital admissions!
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As chancellor Rachel Reeves will know, John Maynard Keynes negotiated the Anglo-American war loans, the strain of which probably killed him. Sadly, we do not have a genius like Keynes to help us today. Nonetheless, is this apparent fairness anomaly something the Treasury should reflect on, to relieve hardship?
Paul Shotton (“That old joke about the two kinds of European”, Letters, September 27) writes that artificial intelligence “will render modern language courses obsolete, and people’s time can be freed up to study something far more useful”. But he will know that AI can translate words well enough. However, putting them together to make sense in other languages requires a human brain and training. Word for word translation produces gobbledegook, as most people know.
When I studied modern languages it was certainly not just about translation, but art, history, literature and many other areas. My connections with current multilingual studies indicate that this is still the case. AI is a wonderful tool, a great asset and time saver, but not to be confused with the human brain, which is still needed to transform a message — one that makes sense — into another language.
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