Food prices rising at slowest pace since 2006

Shoppers are benefiting from the lowest food inflation since at least 2006 after falls in the price of kitchen essentials such as milk, cheese and eggs.

The latest shop price index from the British Retail Consortium and Nielsen shows food inflation at just 0.1% in October after three consecutive months at 0.3%. It is the lowest recorded rate in the eight years since the series began.

Overall, shops reported deflation for the 18th consecutive month, accelerating to 1.9% in October from 1.8% in September as supermarket till wars and discounts on clothes and electrical goods continue to have an impact.

Prices are also benefiting from the lower cost of many agricultural commodities, while crude oil prices have fallen sharply.

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For the first time since Feb 2010, the BRC said the fresh food sector experienced deflation with milk, cheese, eggs, vegetables and convenience food all cheaper than they were a year ago.

Non-food deflation slowed marginally to 3.1% in October from 3.2% in September, the survey added.

BRC director general Helen Dickinson said: "With the current competitive environment, retailers are passing most of these savings onto consumers.

"As Christmas swiftly approaches, there is plenty of evidence to suggest that budgets will go a little bit further this year."

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