The figures show that strong sales growth is not creating worrying inflationary spikes

Bill Moyes BRC

The British Retail Consortium (BRC), which monitors the cost of food, household goods and clothing with its shop price index, reported that prices rose by 0.45% during April.

"The current levels of consumer confidence should not give the Bank of England cause for concern as competition and efficiency in the retail sector continue to keep High Street inflation way below any rises consumers are experiencing elsewhere," said the BRC's director general, Bill Moyes.

The prices increases were attributed to the rising cost of food items, such as convenience foods and onions.

The lack of price pressures in the economy has allowed the Bank of England to keep interest rates on hold.

On Thursday the Bank said it had kept rates unchanged at 4% for the sixth month in a row.

Record annual rise

On an annual basis, however, prices were up by 1.07% this April compared with April 2001, the biggest annual increase since the BRC index began.

Despite this, prices are at the same level as in June 1998 and lower than at the end of 1997.

They are also below the three-month underlying inflation (RPIX) average of 2.37%.

"Even with the rise in the [BRC] Index, the figures show that strong sales growth is not creating worrying inflationary spikes in the RPIX," said Mr Moyes.

March sales

Last month, the BRC reported that retail sales recorded their strongest growth in six years.

Like-for-like sales rose by 7.5% compared to the previous year, the biggest rise seen since 1996.

The BRC represents 90% of British retailers.