Prices growing at lowest rate since January

The British Retail Consortium's Shop Price Index for October revealed today that price inflation has fallen to the lowest rate since January, with prices 0.80 per cent lower than this time last year.

The price of non-food items showed a year-on-year decline for the sixth consecutive month and prices are now 1.64 per cent lower than last year.

BRC director-general Kevin Hawkins said: 'The reliance on discounting to attract value-conscious customers and sustain the momentum in the pre-Christmas weeks kept overall shop prices in November at lower levels than a year ago. However, in the coming weeks the heavy promotions are likely to fade, because many retailers have taken a cautious view of sales and are operating on lower stock levels than last year.'

Overall shop prices in November increased by 0.43 per cent from October, driven by a rise of 1.22 per cent in the price of non-food items.

The prices of non-food items have increased by 1.22 per cent since October, the largest month-on-month rise since October 2003.

The majority of the increases in the non-food category came from furnishings and bathrooms as promotions came to an end.

Despite showing an increase compared with October, non-food items are still cheaper than in previous years, with the index showing they are 3.16 per cent lower than two years ago.

In food, prices rose by 0.53 per cent in November against the like for like period.

Factors leading to the decline in food prices included seasonal fluctuations in vegetables.