Following two months of mild inflation, Shop Prices are back in deflationary territory in October. Year-on-year, prices have decreased by 0.2%, compared to the 0.2% increase seen in September, according to British Retail Consortium.
Non-Food deflation deepened in October to 1.1% from 0.9% in September.
Food inflation slowed to 1.3% in October from 1.9% in both September and August.
Fresh Food inflation decelerated to 1.0% in October from 1.6% in September.
Ambient Food inflation slowed to 1.8% in October from 2.4% in September.
The cooling of global food prices, particularly of meat and dairy products, has started filtering through into Shop Price Inflation. Prices of vegetables are also falling: although the hot dry weather in the summer is still pushing up on the prices of some domestically grown products, as we move into a period of greater reliance on imported fresh produce the impact on the overall vegetable price index is weaker.
The deepening deflation of Non-Food reflects a return to the recent trend, in which the strength of competition in the face of weak consumer demand has led retailers to keep prices low and falling. This acceleration in the pace at which prices are falling comes after a few months in which changes to promotional strategies pushed Non-Food prices closer to inflation.
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