The Zhitong Finance App learned that at a time when the Bank of England is considering starting interest rate cuts soon, clothing, footwear, and other non-food products sold in British stores have fallen into deflation for the first time in more than two years. According to data released by the British Retail Consortium (British Retail Consortium) on Tuesday, non-food prices in the UK fell by about 0.6% in the first week of April. The last time there was price deflation in this category was from June 2019 to December 2021. After that, due to a sharp rise in consumer spending after the COVID-19 pandemic, supply shortages due to supply chain issues, and the escalation of the Russian-Ukrainian conflict, UK inflation began to soar to 10% thereafter.

Helen Dickinson (Helen Dickinson), CEO of the British Retailers Association, said: “The level of price inflation in British stores is showing signs of overall price normalization, which is a relief for British households.”

The British Retailers Association said in a data report that non-food prices such as clothing and footwear are cheaper than before. Some of the UK's best-known retailers have said in recent weeks that the pressure on prices in the UK has abated significantly compared to before. Simon Wolfson (Simon Wolfson), head of Next, said: “We are entering a new era of prices.” The high-end street fashion store released an optimistic update report last month.

The owner of Primark, a well-known British discount chain, also raised sales expectations last week. George Weston (George Weston), CEO of Associated British Foods (Associated British Foods), said that as wages rise higher than inflation, the company's overall sales may increase further.

Overall, data released by the British Retailers Association shows that the overall retail price of the store only increased by 0.8%, even when driven by a sharp increase in food prices of 3.4%. However, these two figures are still below the relatively high levels of 3.7% and 1.3% respectively last month, reflecting a marked decline in food prices.

This data supports expectations that the Bank of England will cut interest rates from 5.25%, a 16-year high benchmark interest rate, even though the interest rate futures market expects the central bank to cut interest rates only twice this year. Threadneedle Street policy makers will meet next Thursday to set interest rates.

Bank of England Governor Bailey recently said, “Europe - I mean geographically Europe, which is quite different from America's inflation dynamics.” He said the US is facing greater “demand-led inflationary pressure” compared to the UK economy where demand has stagnated, and pointed out “strong evidence” that the pressure on UK prices is easing. Bank of England Deputy Governor Ramsden further emphasized these views, saying that the risk of inflation in the UK now tends to “decline,” and that the UK no longer looks like an “anomaly” in terms of price pressure, but more like the Eurozone.

According to another survey data released by the Confederation of British Industry (CBI) on Tuesday, the inflationary pressure faced by the British service sector has abated, particularly in the commercial and professional services sector.