UK Grocery Inflation Eases to 3.1% as Iran Risks Build

UK grocery inflation slowed to 3.1% in the four weeks to 17 May, down from 3.8%, offering near-term relief ahead of June’s official CPI print. This follows Tuesday’s CBI Distributive Trades survey, which showed retailer sentiment improving modestly to -46 versus -50 expected and -68 prior, though still deeply negative. Sales volumes missed seasonal norms, selling-price growth hit its slowest pace in over a year, and firms signaled cuts to investment and hiring. Grocery sales rose 1.5% year-on-year, aided by higher promotions, while the Bank of England warns food inflation could reach 6-7% later in 2026 once Iran-related supply shocks fully pass through. The mixed data leaves the UK 100 with limited near-term downside but persistent upside inflation risks.