LONDON, July 9 British retailers saw the biggest
annual decline in prices since at least 2006 in June, with
cheaper furniture, electricals and clothes as well as a
supermarket price war all contributing, an industry group said
The British Retail Consortium reported that prices in shops
fell 1.8 percent last month compared with a year earlier. The
decline was the biggest annual drop since the survey began in
Food prices were 0.6 percent higher - the smallest gain on
record - while non-food prices were 3.4 percent lower, another
"Fierce competition among grocers has driven food price
inflation to record low levels and with some grocers having
announced plans to keep prices down, consumers stand to benefit
for a while to come," said BRC director-general Helen Dickinson.
British supermarkets have embarked on a widespread price
cuts in the face of competition from German discounters, with
mixed results. Last month, Tesco reported its largest
drop in quarterly sales in 40 years despite price cuts.
Official consumer price inflation - which covers a wider
range of goods and services than the BRC measure - fell to a
four-and-a-half year low of 1.5 percent in May.
The Bank of England expects inflation to be close to 2
percent for the next two to three years.
(Reporting by David Milliken; Editing by Larry King)