Prices in British shops fell at the fastest pace in more than three years in September, the British Retail Consortium (BRC) said on Tuesday.
This is the latest sign in the UK market that the inflation squeeze on consumers is fading.
Annual shop price deflation dropped to 0.6% in the 12 months to September, the BRC said, reaching its weakest level since August 2021.
It was also slower than the 0.3% fall in the month before.
It was the seventh time in nine months that the pace of price growth has weakened.
Non-food deflation fell to 2.1% – down from a drop of 1.5% in August.
The BRC boss Helen Dickinson said, “Easing price inflation will certainly be welcomed by customers, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend.”
Food price inflation rose to 2.3% from 2.0% – an increase Dickinson attributed in part to poor harvests in key farming areas, which led to higher prices for cooking oil and sugar.
Official figures showed consumer price inflation held at 2.2% for the second month in a row in August, well below a 41-year high of 11.1% in October 2022.
Services inflation, however, edged up. Services inflation is a closely-watched indicator of underlying inflation pressure by the Bank of England (BoE).
The central bank is expected to cut borrowing costs in November after holding its key interest rate at 5% in September.
BoE policymaker Megan Green said last month that she saw a risk that weak consumer demand could rebound by more than the central bank has anticipated.
Consumers surveys have shown that many households remain cautious about potential tax hikes in finance minister Rachel Reeves’s first annual budget later this month.
