Prices in British shops fell at their fastest rate in over three years this September, according to a report from the British Retail Consortium (BRC) released on Tuesday.
This decline signals a further easing of the inflationary pressures that have been squeezing consumers.
Annual shop price deflation dropped to 0.6% in the 12 months leading to September, the BRC reported. This marks the steepest fall since August 2021 and a sharper decline than the 0.3% decrease recorded in August.
This is the seventh time in the past nine months that the rate of price growth has slowed.
Non-food prices saw a significant decline, with deflation deepening to 2.1% in September from 1.5% in August.
"Consumers will undoubtedly welcome easing price inflation, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could potentially reverse this trend," said BRC CEO Helen Dickinson.
However, food price inflation edged up, rising to 2.3% from 2.0% in August. Dickinson attributed this increase in part to poor harvests in key agricultural regions, which pushed up the prices of essential items like cooking oil and sugar.
Official data showed that overall consumer price inflation remained steady at 2.2% for the second consecutive month in August, significantly lower than the 41-year high of 11.1% recorded in October 2022.
Despite this, services inflation—a key measure closely monitored by the Bank of England for signs of underlying inflation—ticked upward.
The Bank of England is expected to lower borrowing costs in November, following a decision to maintain its key interest rate at 5% in September.
Last month, Bank of England policymaker Megan Greene expressed concern that weak consumer demand could rebound more strongly than the central bank has forecast.
Consumer confidence surveys indicate that many households remain cautious, particularly in light of potential tax increases in finance minister Rachel Reeves' first annual budget, set to be announced later this month. Photo by Philafrenzy, Wikimedia commons.