Shop prices enter third year of deflation as food costs fall

May's drop in shop prices reinforces view that UK inflation will be low for rest of year

Prices in British shops have moved into their third year of decline as a result of widespread supermarket discounting and cheaper fresh food , according to new industry figures.

The British Retail Consortium (BRC) said shop prices in May were down 1.9% on last year's levels, unchanged from April's rate of decline and the 25th straight month of deflation. The fall will reinforce expectations that the broader official measure of inflation in the UK will remain low for some months to come after turning negative in April.