The British Retail Consortium reported that prices in supermarkets and chain stores rose by 8.4% in June compared to the same month last year, down from the annual increase of 9.0% in May, which was the highest rate since BRC reporting began in 2005.
The decline in store price inflation is the second this year, after the BCH reported a slight decline in April.
Food prices rose more slowly for the second month in a row, but at 14.6% the increase continues to put a big strain on many families’ households.
“If the current situation continues, food inflation should fall to single digits later this year,” BRC chief executive Helen Dickinson said.
Retailers cut prices on staples such as milk, cheese and eggs, while prices for clothing and electrical goods also fell, she said.
Earlier this month, Tesco ( TSCO.L ), Britain’s biggest retailer, said food inflation had peaked.
Last week, the Bank of England raised borrowing costs to their highest level since 2008, raising the benchmark Bank Rate to 5% as it stepped up its fight against inflation, which has fallen more slowly than it had hoped.
“If global supply chain costs continue to fall, we may already be past the peak of price increases,” said Mike Watkins, head of retailer and business insight at NielsenIQ, which co-produced the data.
“However, with most households needing to save money, purchasing behavior for the rest of this year is still likely to shift towards essentials, with discretionary spending de-prioritized or delayed.”