High street price cuts deepened last month as fresh food costs dropped at the fastest pace for at least eight years, according to industry figures that will reinforce expectations the UK is headed for a brief period of deflation.
The British Retail Consortium reported deflation in overall shop prices for the 22nd consecutive month, as prices in February fell 1.7% on a year ago. That followed deflation of 1.3% in January.
Non-food products again drove the overall drop, helped by clothes discounts and special offers on furniture and DIY items, the BRC said. Non-food items were down 2.5% on the year, the biggest drop for eight months.
Food prices also fell in February, signalling a change of trend after they had risen throughout much of last year. In February, they were down 0.4% against a backdrop of falling commodity prices, such as sugar and corn, and as a price war between supermarkets continues.
