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Shop price inflation falls to 2% in November

Overall shop price inflation dropped to 2% last month, from 2.1% in October, representing the lowest rate for 12 months as the supermarket price war kept prices down.

Inflation is expected to fall further in the first part of next year, according to the BRC-Nielsen Shop Price Inflation Index.

Non-food inflation remained flat at 0.8%.

In clothing and footwear deflation slowed from 3.9% in October to 3.2% in November.

British Retail Consortium director general Stephen Robertson said:  “At a time when petrol prices and utility bills are sky-high, fierce competition in the retail sector is helping hard-pressed families manage their budgets.

“Shop price inflation is now at its lowest for a year despite retailers having to cope with rising costs from suppliers and surging energy and distribution bills.

“For a second consecutive month the supermarket price war has helped reduce food inflation. As our recent research showed, a typical basket of goods purchased in the UK is around 5 per cent cheaper than the European average.

“Inflationary pressures are easing. Cheaper commodities will help retailers keep prices down while the Chancellor’s decision to postpone January’s three pence increase in fuel duty will also benefit households.

“Retailers have protected consumers from the full impact of global commodity and currency shocks during 2011. In 2012 the Government should do more to reduce the costs it controls, chiefly business rates and the burden of regulation.”

Nielsen senior manager, retailer services Mike Watkins said: “It’s been a slow start to Christmas trading and many retailers have reduced prices further in recent weeks to help boost footfall and spend in store.

The outlook for inflation is however much more positive than this time last year and shop price inflation is expected to fall further in the first part of 2012.”

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