Consumer shopping bills could increase in autumn as costs rise and the red tape surrounding Brexit intensifies.
The British Retail Consortium (BRC) has warned that consumer prices will suffer from the high cost of food, shipping, and commodities.
The BRC said that retail prices fell last month due to the lower cost of footwear and clothing.
However, cost constraints are mounting for retailers, with global food prices at the highest they’ve been since 2014.
At the same time the cost of shipping has trebled in the last two years, with commodity prices rising too.
BRC chief Helen Dickinson said: "Retailers may be forced to pass on some costs onto their customers.
"We will likely see the costs filter through in the second half of this year”.
Dickinson urged the government to find ways to minimise the impact of the new checks at EU borders from October in order to ease the burden on consumers.
While the cost of footwear and clothing fell, prices in the electrical and furniture secors continued to rise with retailers still feeling the effects of the disrupted global supply chains at the start of the year.
Supermarkets are fighting to keep their share of the market and allowed food prices to fall in May for the second consecutive month. However, they dropped by only 0.3% compared to 0.6% in April.
Head of retailer and business insight at NielsenIQ, Mike Watkins, said: "With high street retailers continuing to offer price reductions and supermarkets promoting seasonal food and drink, this is helping to offset cost-of-living increases”.
"Consumers will be seeing the impact of higher energy and fuel costs in household bills and while some cost price increases are coming through the supply chain, this is not yet enough for shop price inflation to return."
A government spokesperson said that the government is "absolutely committed to price stability".
"We continue to take action to support living standards and the lowest paid.
"The furlough and self employed support schemes have protected jobs and incomes throughout the pandemic and the increase to the National Living Wage in April this year is providing an annual pay rise of almost £350 for a full-time worker earning the National Living Wage.
"We're supporting businesses as they adjust to our new trading relationship, and engaging regularly to ensure businesses can trade effectively with Europe and seize new opportunities."
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