LONDON – Prices in British stores are rising at a record pace as the cost-of-living crisis shows little indication of easing.

Shop price inflation accelerated to 9 per cent this month, a new peak for an index that started in 2005, the British Retail Consortium (BRC) said on Tuesday. This is an increase from 8.8 per cent in April.

There are signs inflation is becoming entrenched in Britain and that Brexit has exacerbated the cost-of-living crisis. Consumers are prioritising their spending on pricey essentials like food and energy and cutting back wherever possible.

“To help mitigate the impact of inflation, shoppers are saving money by looking for seasonal promotions on the high street and taking advantage of the price reductions offered by supermarket loyalty schemes,” said Mr Mike Watkins, head of retailer and business insight at NielsenIQ, which produces the data for the BRC.

Britain’s inflation rate remained much stronger than expected last week, with the fastest increase in services and core prices in more than three decades fuelling bets on more Bank of England interest rate rises. Chancellor of the Exchequer Jeremy Hunt has said he is in favour of higher rates to tackle inflation, even if it causes a recession.

Food inflation decelerated to 15.4 per cent in May, down from 15.7 per cent in April, according to the BRC. Lower energy and commodity costs meant lower prices on staples including butter, milk, fruit and fish.

Still, the Office for National Statistics put the figure for food price inflation at 19 per cent last week, close to the highest rate in more than 45 years.

Mr Hunt has met food manufacturers to discuss the soaring price of groceries and to ask for businesses to soften the blow on consumers. The competition watchdog is also investigating prices in fuel and grocery markets.

Supermarkets are trying to show they are not profiting from higher food prices. J Sainsbury has grouped its cheapest own-label ranges under a new brand, Stamford Street, to make them more obvious to customers. Marks & Spencer Group said last week it is not passing full price rises on to consumers and that it is on the lookout to pass on deflation.

“We’ve tried to absorb as much of that as possible,” Marks & Spencer chief executive officer Stuart Machin said last week during a call with reporters. “We’ve started to protect value by lowering prices the minute we get any deflation in our cost of goods, passing that on to customers straight away.” BLOOMBERG