Shop prices were 0.4 per cent higher in August than the same time last year, but eased on a month-on-month basis – down from 0.6 per cent in July, according to the BRC-Neilsen Shop Price Index.
Food inflation slowed for the fourth consecutive month, dropping to 2.1 per cent from 2.8 per cent in July, although it remains the principal cause of shop price inflation.
Non-food price deflation continued, with year-on-year declines recorded every month this year. In August, non-food prices were 0.4 per cent lower than a year ago.
BRC director-general Kevin Hawkins said: “The level of inflationary pressure on the high street is continuing to fall. Retail competition for sales in a slowly growing market will keep inflation low."
The national picture contrasted strongly with the picture in London, where prices in August were up 2.8 per cent against last year, although this was lower than the 3.1 per cent recorded in July.