UK sees fastest price drop in two years

The British Retail Consortium says huge discounting by the supermarkets coupled with the cut in VAT rates has brought non-food prices down “dramatically”. It says such measures have contributed to the fastest fall in non-food prices in two years.

Non-food discounting, which saw the likes of M&S and Debenhams stage pre-Christmas one day sales triggered a year on year price drop of 2.4%. Non-food sector prices were the only ones to fall year on year, but price inflation was down compared with November’s figures across the board.

Overall shop prices grew much less in December – 0.5% year on year from 2007 -2.2% lower than November’s increase. Food inflation was down to 6.2% – compared with a rise of 7.1% in November – its lowest level since last May.

BRC director general Stephen Robertson has urged the Government to help ease the sector’s profit-squeeze by reducing business rates.

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