Food price inflation falls to lowest ever levels
Overall shop prices deflated by 1.8 per cent in June, the deepest level of deflation since records began in 2006. Non-food deflation accelerated to 3.4 per cent in June from 2.8 per cent in May. This figure is also the lowest recorded.
According to Helen Dickinson, British Retail Consortium director general, fierce competition amongst grocers has driven prices down. With a stable commodity market and a strong pound, she said inflation is set to remain low in the medium term.
Dickinson said: “While the economic recovery continues to gather pace it was not all good news as household disposable incomes remain under pressure. Interestingly, while wage rises remain lacklustre throughout the economy the squeeze on disposable incomes is not coming from retail but other areas of the economy, such as leisure and recreational activities.”