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Shop price deflation remains at four-year low

Prices decreased at the same annual rate in October as in September, the British Retail Consortium (BRC) has revealed.

Overall deflation was at 0.1%, the shallowest deflation rate in the past four years, according to the October BRC-Nielsen Shop Price Index.

The deflation of non-food products was at 1.5%, also the same rate as in September.

Helen Dickinson, chief executive at the British Retail Consortium, said: “Forces on inflation are pulling in both directions. On the one hand global food prices continue to head upwards at the same time as the weaker pound has left retailers facing significantly higher bills for imported goods. On the other hand, the tightening squeeze on discretionary spending power is reducing the ability of retailers to pass on increased import costs.

“These dynamics are playing out differently across the industry. Food inflation remains firmly in positive territory, while electronics recorded year on year inflation this month, for the first time since the SPI began in 2006. However, a sharp increase in promotional activity, in order to clear stock, pushed both clothing and furniture further into deflation.”

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