Prices in stores rose just 0.8 per cent this month in a sign inflation has been “controlled”, industry figures show.
The year-on-year increase, up from 1.3 percent in March, was the lowest since December 2021 and non-food prices actually fell, the British Retail Consortium (BRC) said.
It is the latest sign that the cost of living crisis is easing, raising hopes that the Bank of England may soon cut interest rates.
The figures come just over a year after in-store price increases peaked at 8.9 percent in March 2023.
“Business price inflation levels are showing signs of normalising, providing relief to households,” said BRC chief executive Helen Dickinson.
Fighting inflation: Trade prices rose just 0.8% this month, the lowest since December 2021 and down from 1.3% in March
Pressures on the cost of living intensified in 2022 after the Russian invasion of Ukraine drove up food and energy prices.
The BRC indicator showed that food price inflation reached a painful 15.7 percent a year ago. It has now fallen to 3.4 percent.
Non-food inflation reached 5.9 percent in March last year, but has now fallen to -0.6 percent, meaning prices are lower than a year ago. He was last negative in December 2021.
Dickinson said promotional offers on clothing and footwear were behind the drop in non-food prices.
Lower prices for fresh produce such as butter, fish and fruit helped reduce food inflation, he added.
However, turmoil in the Middle East could mean more volatility.
“While consumers will welcome lower trade price inflation, geopolitical tensions and the knock-on impact on commodity prices, such as oil, pose a threat to future price stability,” Dickinson said.
An independent report yesterday suggested that prices of some commodities could come under pressure as a result of unusually wet weather in the UK over the autumn and winter.
This could cause crops to fall by a fifth compared to the average in recent years, driving up the cost of bread, beer and biscuits, according to the Energy and Climate Intelligence Unit (ECIU).
Separately, Asda supermarket’s income tracker showed that, with wages growing faster than price increases, household purchasing power has continued to rise.
It rose to an average of £233 a week in March, £21.50 more than the previous year and the 12th consecutive month of growth.
The official inflation rate – which soared to 11.1 percent a year and a half ago – has fallen sharply over the past year and fell to 3.2 percent in March.
The measure, which incorporates a broader range of goods and services than the business price index, is expected to have fallen to around 2 percent, the Bank of England’s target, this spring.