UK shop prices declined for the first time in nearly three years in August as deep discounting to shift summer stocks pushed down non-food prices further, data released by the British Retail Consortium showed on Tuesday.

The shop price index declined 0.3 percent year-on-year in August, in contrast to the 0.2 percent increase in July. This was the lowest rate since October 2021. The three-month average of the shop price index remained flat.

The decline in non-food prices deepened to 1.5 percent from 0.9 percent in the preceding month. At the same time, food prices grew at a slower pace of 2.0 percent after rising 2.3 percent in July.

Fresh food inflation slowed further to 1.0 percent from 1.4 percent in July. Ambient food inflation weakened to 3.4 percent from 3.6 percent.

Retailers discounted heavily to shift their summer stock, particularly for fashion and household goods, BRC Chief Executive Helen Dickinson said.

The latest discounting followed a difficult summer of trading caused by poor weather and the continued cost of living crunch impacting many families, Dickinson noted.

Dickinson said retailers will continue to work hard to keep prices down and households will be happy to see that prices of some goods have fallen into deflation. "The outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions," she said. "As a result, we could see renewed inflationary pressures over the next year," Dickinson added.

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