Shop prices fall in March

March shop prices this year were 1.17 per cent lower than in March last year, according to the British Retail Consortium (BRC) Shop Price Index figures released today. This marks the lowest inflation rate since January last year.

Prices fell 0.35 per cent compared to February, this was on top of a 0.10 per cent fall from January to February.

Month-on-month figures for food prices fell for the first time this year - by 0.49 per cent. Non-food prices fell by 0.29 per cent.

BRC Director General Kevin Hawkins said: 'With the market remaining flat at best and retailers' cost base increasing, the argument for a cut in interest rates is as strong as ever.'

Mike Watkins, senior manager retailer services at market researchers AC Nielsen, added: 'The downward pressure on pricing continues to impact all channels and a key driver this month was a deflation in food items, so all retailers will need to continue to drive footfall with focused promotional activity in the weeks remaining till Easter.'

Figures from the Scottish Retail Consortium (SRC) showed a greater month-on-month fall than the UK, with prices falling by 0.46 per cent compared to February. However, prices are still higher in Scotland than elsewhere in the UK.

SRC director Fiona Moriarty said: 'This brings Scotland more in line with the rest of the country, with consumers enjoying low prices.'