Consumers in Britain have been handed a boost after it was revealed that shop prices fell between May and June.
The British Retail Consortium found that its shop price index measuring the average prices across the high street decreased by 0.2% month-on-month, with both food and non-food items lower than the previous month.
It marks the lowest monthly food inflation seen in the industry since October 2021, before the cost of living crisis began and when the Bank of England was only beginning its interest rate hike cycle.
Today's figures provide another boost for the UK's central bank as economists grow in confidence over a potential rate cut later this year.
Compared to last year, the shop price index was up 0.2% in June, down from 0.6% in May.
Food prices are close to 2.5% higher year-on-year while non-food prices are down 1.0%, from a 0.8% level of annual deflation in May.
Meanwhile, the cost of goods on average is down 1% compared to June 2023.
“During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off,” said Helen Dickinson, chief executive of the BRC.
“Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee.
"Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. This was particularly true for TVs with great deals to capitalise on the Euros fever.”