Prices in British stores fell at the fastest rate in more than three years in September, the British Retail Consortium said on Tuesday, adding to signs that inflation pressure on consumers has eased.
Annual store price deflation fell to 0.6% in the 12 months to September, the BRC said, its weakest pace since August 2021 and slower than the 0.3 decline. % recorded during the previous month.
This is the seventh time in nine months that the pace of price growth has weakened.
Non-food deflation rose to 2.1%, from 1.5% in August.
“Lower price inflation will certainly be welcomed by consumers, but ongoing geopolitical tensions, climate change and regulatory costs imposed by governments could reverse this trend,” said Helen Dickinson, the boss of the BRC.
Food price inflation rose to 2.3% from 2.0%, a rise Dickinson attributed in part to poor harvests in key agricultural regions, which led to higher oil prices cooking and sugar.
Official figures show consumer price inflation held at 2.2% for the second consecutive month in August, well below the 41-year high of 11.1% reached in October 2022.
However, services inflation, a closely watched indicator of underlying inflationary pressure by the Bank of England, rose slightly.
The central bank is expected to cut borrowing costs in November after keeping its key interest rate at 5% in September.
Last month, BoE policy chief Megan Green said she saw a risk that weak consumer demand could rebound more than the central bank anticipated.
Consumer surveys have shown that many households remain cautious about possible tax rises planned in Finance Minister Rachel Reeve’s first annual budget, which will be presented later this month.
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