Newspaper article The Journal (Newcastle, England)

Warning as Deflation in High Street Continues

Newspaper article The Journal (Newcastle, England)

Warning as Deflation in High Street Continues

Article excerpt

Byline: Iain Laing

DEFLATION has arrived on Britain's high street for the first time since February 2007 as the recession continues to drag down both prices and demand.

Shop prices across the retail sector dropped by 0.1% last month compared with a year ago, according to the latest British Retail Consortium (BRC)-Nielsen Shop Price Index.

The fall in price tags is being driven by huge falls in food price inflation, according to the BRC. The figures showed food inflation eased for the fifth month in a row, to 2.3%, as recession hits demand. On a month-onmonth basis, food inflation fell the most since the index began in 2005.

Food inflation is now at the same level it was two years ago - down from a high of 10% last August when food prices rocketed amid the oil and commodity price bubble.

The BRC added that non-food goods remained cheaper than they were a year ago, down 1.4%, continuing a trend now seen for nine straight months.

Stephen Robertson, director-general of the BRC, said: "The fall has been driven by a huge drop in food inflation which is now less than a quarter of what it was last August. …

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