​Food inflation falls to lowest level in a year as shop prices continue to drop

Food inflation dropped to 11.5% in August, down from 13.4% in July, and is below the three-month average inflation rate of 13.6%, according to the BRC-NielsenIQ Shop Price Index.

Annual shop price inflation declined to 6.9% in August compared with 7.6% the previous month. Shop price growth is at its lowest since October 2022.

Fresh food inflation slowed to 11.6% in August from 14.3% in July. Ambient food inflation fell to 11.3% during the month, down from 13.8% in June.

British Retail Consortium (BRC) chief executive Helen Dickinson said: “Better news for consumers as shop price inflation in August eased to its lowest level since October 2022. This was driven by falling food inflation, particularly for products such as meat, potatoes and some cooking oils.

“These figures would have been lower still had the government not increased alcohol duties earlier this month. Across non-food categories, toiletries and cosmetics saw price growth ease as many key components became cheaper; meanwhile, inflation for clothing and footwear increased as retailers unwound their extensive summer sales.

“While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.

“Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.

“A potential £400m hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the chancellor intervenes.”