Retail prices fell 1.4% in July compared with last year, marking the 27th consecutive month of retail price deflation.

Data released today from the BRC-Nielsen Shop Price Index show prices fell 0.8% from June’s figures, the largest monthly fall in overall prices since January 2014.

That was despite a fractional increase in food prices of 0.1% compared with July 2014, following a year-on-year drop in June of 0.4%.

BRC director-general Helen Dickinson described the increase in food prices as “a short-term blip in the longer term downward trend”.

The bulk of the downward pressure came from non-food items, which were 2.3% lower than a year before. The sharpest falls came in the books, stationery and home entertainment sector, which was down by 5.5%, and clothing & footwear, which fell 4.9% from last year.

The only non-food sector in which prices rose in July was health and beauty, which recorded an increase of 1.6% compared with the same period a year before.

Influence of deflation

Commenting on the results, Nielsen head of retailer and business insight Mike Watkins said: “Deflation in retailing has been a big influence on sales over the last 12 months, as has the unpredictable weather, price cuts and short-term promotions.

“In food retailing, whilst ambient prices are becoming more stable, many fresh foods are again cheaper than this time last year and there have been some attractive sales and offers across non-food retailing in recent weeks”.

Much of the RPI fall was becasue of decreasing oil prices. The price of crude oil has gradually declined over the past year, and is down 46% year-on-year after a sharp 18% fall last month as a result of the tentative lifting of sanctions on Iran by the US.