UK shop price inflation fell 0.2 percentage points to 1.1 per cent in March, which was the same level as November, according to the BRC-Nielsen Shop Price Index (SPI).

Food prices dropped 0.5 percentage points to 4.1 per cent in March and non-food inflation fell from -0.3 per cent to -0.5 per cent.

BRC director-general Stephen Robertson said that the drop in overall shop price inflation was driven largely by significant falls in the price of electricals and clothing, as well as a slowdown in the rapid rate of food price increases.

High street prices in London experienced their 13th consecutive month of inflation in March, up 1.8 per cent year-on-year, according to the index.

However, the credit crunch appeared to be contributing to a spending downturn, with inflation falling to its lowest rate in nine months.

London prices still beat the high street’s overall performance across the UK, which achieved SPI inflation of only 1.1 per cent.

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