Aldi says a basket of its goods is cheaper than a year ago as it cuts prices

Supermarket has come under pressure as rivals such as Tesco and Sainsbury's have promised to match its prices

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Aldi has said the price of a basket of its goods is lower than a year ago despite ongoing grocery inflation, as the discount chain tries to fight back against increasing pressure from rivals' price-matching schemes.

The German-owned budget retailer said a slowdown in growth this year - sales are rising by just 0.5% compared with 16% last year - was partly caused by a decision to cut prices as big chains including Tesco and Sainsbury's have won back customers by promising to match Aldi on key items.