Shop price inflation accelerated to 0.8 per cent in May from 0.4 per cent in April, according to the latest figures from the British Retail Consortium (BRC) and Nielsen.

Non-food prices increased by 0.2 per cent in May, compared to a 0/6 per cent drop in April. This is the second month of non-food inflation this year, in contrast to the past six years of deflation.

Food inflation continued to decelerate to 1.8 per cent in May, from 2.2 per cent in April, while fresh food inflation was steady at 1.5 per cent in May. Ambient food inflation slowed to 2.1 per cent in May, down from 3.2 per cent in April.

BRC chief executive Helen Dickinson explained that the forces driving inflation continue to play out differently across the industry.

“The price rises in some non-food categories, such as furniture and health and beauty, follow years of deep discounting, while other areas, such as electrical and clothing, have seen greater technological disruption and more intense competition, putting downwards pressures on prices.

“Rising costs associated with currency depreciation, stockpiling, rising minimum wage and the Apprenticeship Levy, have all put upwards pressure on prices for a while, and it now appears that retailers cannot absorb them any longer,” she added.

Mike Watkins, head of retailer and business insight at Nielsen, added: "Whilst there are still cost price increases coming through the supply chain, food inflation remains lower than CPI and supermarkets continue to offer price reductions, in particular on seasonal food and drink, which is helping to offset other cost of living increases.

“Inflation has returned to non-food but consumers remain cautious and there is intense competition on the high street – with non-food retailers facing uncertain levels of demand, price discounting could quickly return if demand weakens over the next few months"

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