This is lower than the 0.2% inflation for July and is due to retailers slashing prices as part of a clear-out of summer stock, according to the British Retail Consortium (BRC).
Prices for non-food products were in deflation by -1.5%, which is lower than the -1.1% rate of the three-month average. Indeed, this is at its lowest level since July 2021, while the cost of food products eased from 2.3% in July to 2% in August.
This marks its lowest rate of inflation in the category since November 2021, around the time the rising costs of energy and food caused the cost-of-living crisis to commence for millions of UK households.
Elsewhere, fresh food inflation slowed to 1% from 1.4% the previous month, which is also the lowest rate for almost three years.
There was also a slowdown in the rise of ambient food prices, which covers tinned products and other foods that can be contained in a sealed container including pasta and rice.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
Inflation for those products eased from 3.6% last month to 3.4% in August.
Summer of sport and unpredictable weather
Mike Watkins, head of retailer and business insight at NielsenIQ – the firm that provides the research for BRC’s shop price inflation tracker – says a combination of the wild weather, the Olympics and the men’s European Football Championship influenced retailers’ pricing decisions.
Watkins said: “Shop price inflation has fallen again in August, as many non-food retailers have kept promotional support due to the unpredictable weather and food retailers have introduced more price cuts to help drive incremental sales during the ‘summer of sport’.”
Helen Dickinson, chief executive of the BRC, says the deflation was due to “retailers discounting heavily to shift their summer stock, particularly for fashion and household goods.”
Dickinson said: “This discounting followed a difficult summer of trading caused by poor weather and the continued cost-of-living crunch impacting many families. Food inflation eased with fresh food prices, especially fruit, meat and fish, seeing the biggest monthly decrease since December 2020 as supplier input costs lessened.”
She added: “Retailers will continue to work hard to keep prices down, and households will be happy to see that prices of some goods have fallen into deflation.
“The outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions. As a result, we could see renewed inflationary pressures over the next year.”
