Good morning. Today we're talking about cooling grocery prices, the UK’s competitiveness and Frasers’ shopping spree.

Big Stories

Grocery bills cool

Food inflation may have passed its peak with two surveys showing an improvement. Food price rises fell to 16.5% in the past four weeks, down from the 17.2% last month, according to data from Kantar. It’s the third monthly drop in a row and the lowest level this year although grocery bills remain at historically high levels. Separately Lloyds Bank reported that food manufacturers saw the first drop in their production costs since 2016 in May as lower commodity and energy prices and cheaper shipping outweighed a jump in wage bills. Meanwhile Tesco, Britain's biggest supermarket chain, said food price inflation had peaked and it and peers have said they are cutting the prices of some products and freezing others.

UK loses competitiveness

Britain has fallen six places down the global economic competitiveness rankings because business leaders have lost confidence in the country, due in part to “government incompetence.” The annual World Competitiveness ranking from the International Institute for Management Development saw the UK plunge from 23rd to 29th out of 64 countries. In a separate analysis, the Institute for Public Policy Research warned that years of underinvestment is holding back growth and harming ambitions to build up green industries. It estimated the nation would have received an extra £560bn had investment from private firms and the government stayed at the average of advanced economies since 2005.

Frasers’ shopping spree

Frasers, the owner of Sports Direct, has bought a 9% stake in Currys and 5% in Boohoo in the past week as the group continues to build its retail portfolio. It comes shortly after the group revealed it had built up a 21% position in the electrical goods retailer AO as part of a “strategic partnership” and had built a 10.6% stake in fashion firm Asos. Frasers founder and owner, Mike Ashley, has a long history of acquiring struggling brands, from House of Fraser to Missguided. Last October the billionaire formally stepped down as a director at the group, handing day-to-day running to his son-in-law Michael Murray.

Elsewhere...

Mortgage woes: Chancellor Jeremy Hunt will meet mortgage lenders this week to discuss support for customers struggling with rising mortgage payments.

Postal apology: The boss of the Post Office has apologised for receiving bonus payments related to an inquiry into a long-running miscarriage of justice.

Rental rises: The cost of renting has increased by 10.4% in the past year and in some areas, rent has reached up 40% of average income.

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