The fall in shop prices eased marginally in January but remained in deflationary territory for the 57th consecutive month.
According to the British Retail Consortium (BRC), shop prices fell by 0.5% in January from 0.6% in December, with non-food prices down by 1.9%.
In December, non-food prices were 2.1% lower than in December 2016.
Meanwhile, food inflation moved upward slightly, with January seeing year on year inflation of 1.9%, compared to 1.8% in December. This is the highest rate of inflation since October 2017.
“It was the same story of divergent price movements for food versus non-food categories from the previous months, albeit with non-food prices creeping ever so slightly towards inflation,” said BRC chief executive Helen Dickinson.
“There are reassuring signs for consumers from the fall in latest input price inflation that the worst effects of sterling’s depreciation have now passed. But before raising hopes that stretched household budgets will be offered some much needed slack, we need to consider the impact of rising oil prices which, on reaching a three-year high in January, will inevitably add some heat to the rate of inflation in the coming months,” she added.
“Meanwhile, even at a slowing rate, inflation continues to outpace wage growth in the UK, the effects of which we saw play out in lacklustre festive sales. With this in mind, it was reassuring to get clarity from the Brexit Secretary last week on a transition period that will allow trading conditions to continue from March 2019, thereby maintaining the choice and availability of affordable, quality products for consumers.”