LONDON: British grocery inflation hit its highest level since 2013 in the 12 weeks to Dec.3, driven by price rises in products such as butter, fish and fresh pork, industry data showed on Tuesday.

Market researcher Kantar Worldpanel said grocery inflation was 3.6 per cent in the period, up from 3.4 per cent in the November data.

It said prices were falling in only a few categories, such as fresh poultry and crisps.

Market leader Tesco was the best performing of Britain’s big four supermarkets over the 12 week period. Its sales rose 2.5 per cent, ahead of growth of 2.0 per cent, 1.4 per cent and 1.2 per cent at Sainsbury’s, Morrisons and Asda respectively.

However, all the big four still continued to lose market share to the German discounters, who are continuing to add space aggressively. Aldi’s sales increased 15.1 per cent, while Lidl’s were up 14.5 per cent.

Overall UK grocery sales increased in value by 3.1 per cent year-on-year (yoy).

UK shares were flat on Tuesday as investors await inflation figures, which some economists believe could show prices rising at their fastest rate since 2012, putting pressure on the Bank of England to further raise rates.

At 0810 GMT, the blue-chip FTSE 100 was up 0.01 point at 7454.16 points after a 0.7 per cent gain during the previous session helped by a weaker pound.

UK inflation data for November will be published at GMT 0930 and the Reuters consensus shows an average expectation of a 3 per cent increase year-on-year.

“Price developments will be decisive in determining whether and if so how soon the Bank of England will hike interest rates again”, Commerzbank wrote in a morning note.

France’s Socgen said in a research note it expected inflation to hit 3.2 per cent, an outcome which would require Mark Carney, the governor of the Bank of England, to explain himself in writing to the finance minister, Philip Hammond.

On the corporate front, British industrial equipment hire company Ashtead posted the best performance in early dealings, rising 4.4 per cent after it launched a share buyback programme and raised its annual results forecast.

On the other end of the trading board, Britain’s largest floor coverings retailer Carpetright shed 5.4 per cent after lowering its full-year 2017-18 profit forecast.

Miner and trader Glencore lost 1.3 per cent after a market Update for its marketing division. Mergers and acquisitions dominated early European share trading on Tuesday, while strong oil and tech stocks were not enough to offset a decline in banks.

French tech consultancy Atos’s 4.3 billion euro takeover offer for Dutch cybersecurity company Gemalto helped the tech sector outperform. Gemalto’s shares rocketed 34 per cent to 45.2 euros - just below the bid price.

Reuters