Fresh food inflation is edging up despite sluggish inflation elsewhere in the food sector, according to the latest figures from the British Retail Consortium.

The organisation's latest shop price index showed food prices were 1.2 per cent above a year ago in March - the lowest since the survey began in December 2006.

But after reporting annual deflation for the first time in the survey’s history in February, fresh food inflation rose to 0.5 per cent in March.

Inflationary pressure came from fruit, along with convenience food which also remained higher than the overall index. Vegetables continued to apply considerable downward pressure in this category and on a month-on-month basis, inflation rose by just 0.1 per cent.

BRC director general Stephen Robertson said: "The competitive battle is even fiercer than usual as retailers fight it out to overcome the reluctance of customers to spend caused by pre-election uncertainty.

"Falling shop price inflation is particularly welcome relief for consumers as they face sharp rises in other living costs, such as fuel.

“This is great news. Food inflation has fallen to its lowest for over three years and overall shop price inflation is the lowest since November.

“The competitive battle is even fiercer than usual, as retailers fight it out to overcome the reluctance of customers to spend caused by pre-election uncertainty."

The BRC added that its findings supported Bank of England evidence from December which suggested that less than half of all firms were planning to pass on the increase.

Topics