LONDON Aug 6 Prices in British shops fell last
month at the fastest rate since records began seven-and-a-half
years ago, the British Retail Consortium said on Wednesday,
marking 15 months of sinking prices.
The BRC said retail prices in July were 1.9 percent lower
than a year earlier, marking the largest decline in shop prices
since the series started in December 2006. Prices had fallen by
1.8 percent in June.
Food prices rose just 0.3 percent, also the smallest rise on
record, compared with 0.6 percent in the previous month. The BRC
said there was deep and widespread discounting across grocery
Prices for furniture, electrical goods and gardening tools
fell at a faster rate in July, the BRC said.
"Against a backdrop of stable commodity markets, the
stronger sterling making imports cheaper and wavering retail
spending, current levels of deflation are expected to continue,"
said Helen Dickinson, the BRC's director general.
Official data last month showed consumer price inflation
(CPI) increased to 1.9 percent in June, just below the Bank of
England's 2 percent target, although economists said the rise
was driven by one-off factors.
CPI measures a wider basket of goods and services than the
BRC index, which covers 500 products commonly bought in shops.
Business surveys over the last week showed price pressures
were muted in services and manufacturing companies that comprise
the bulk of Britain's economy.
The BRC said recent announcements from major supermarkets
suggested shop price inflation would stay weak for the coming
Britain's four biggest grocers - Tesco, Sainsbury's
, Morrisons and Wal-Mart's Asda - have
been trying to win back market share that they have lost to
discounters like Aldi and Lidl.
(Reporting by Andy Bruce; Editing by Hugh Lawson)