July retail prices lowest since 2003

Shop prices last month were the lowest for July since 2003, according to the British Retail Consortium. The latest research shows that the BRC Shop Price Index inflation rate for July was 0.6 lower than the same period last year.

Food prices for the month were 1.43 per cent up year-on-year. However, this was offset by a decrease of 1.84 per cent in non-food pricing. Month-on-month, the index showed a decrease of 1.65 per cent in price inflation, compared with June.

Meanwhile, shopper numbers for the month were also the lowest for four years. Footfall monitor SPSL said traffic was down 2.4 per cent year on year. SPSL director of knowledge management Tim Denison said the figures are the lowest since 2001, despite the onset of summer Sales and the school holidays.

The figures are the latest in a mounting body of evidence that indicates a sustained slump in consumer confidence, fuelling calls for a reduction in interest rates.

Commenting on the effects of low inflation, BRC director-general Kevin Hawkins said: 'Yet again, the decline in consumer spending and the intense competition in the retail markets is driving down prices. This is obviously good news for the consumer, but the continuing increase in property and other costs will leave retailers in a position that is not sustainable for much longer. We have repeatedly called for a cut in interest rates over the past few months and we hope that at long last the Monetary Policy Commitee will take action.'