Deflation continued apace in October, with shop prices falling 1.7%, as the BRC warned that imported inflation was “inevitable” next year.
Overall prices declined 1.7%, slightly behind the three-month average of 1.8%, according to the BRC Nielsen Shop Price Index.
Non-food deflation was flat at 2.1% for the second month in a row, slightly behind the three-month average of -2.2%.
Food deflation declined 1.2%, behind September’s -1.3% and in line with the three-month average.
The BRC said shop price deflation would likely move closer to zero as the year came to an end and that inflation would begin during the first half of 2017.
Chief executive Helen Dickinson said: “While we know that the devaluation of sterling since the Brexit vote is stoking inflationary pressures, the good news for consumers is that retailers have been successful in managing this to date and there is still no impact visible in shop prices.
“However, it is inevitable that imported inflation will begin to make its mark and we would expect to start to see this effect coming through in the first quarter of 2017.”