The British Independent Retailers Association (Bira) has responded to announcement that the UK inflation rates have risen to a new 40-year high.

Figures from the Office for National Statistics (ONS) have showed the government’s consumer prices index which measures the price of living – was up from May’s 9.1% figure.

Inflation, which stood at 2.5% in June 2021, has now risen for nine months in a row and it's now expected to peak at above 11% when energy bills rise again in the autumn.

Andrew Goodacre, CEO of Bira, has pointed to the increases in Retail prices below the overall Inflation rate as evidence that margins are being reduced. Retailers are struggling now to not to pass on to consumers ever rising commodity prices, but we are now seeing signs that retail prices are drastically increasing in most sectors.

Mr Goodacre added: "This latest increase to 3.1% Retail Inflation seemed inevitable and we are not surprised to see that some sectors have been effected worse than others.

"Since last summer we have been warning of double-digit supply chain inflation that would result in higher prices. However, retailers are doing all they can to limit the price increases as they recognise that the shoppers have less money to spend. By far the largest Retail Price inflation is seen in Furniture which accelerated to 5.6% in June as retailer’s were forced to pass on supply chain increases.

"These latest increases will, we worry further damage consumer confidence and reduce expenditure. Furthermore, we are concerned about the rising cost of debt payments as a result in interest rate rises as many more independent retailers have increased levels of debt due to Covid.

"We feel that government needs to review the options for paying back the bounce back loans and offer more flexibility to the businesses dealing with a tsunami of cost increases," he said.