Food price inflation has slowed to its lowest level this year amid falling prices for staples such as oils, fish, and breakfast cereals, figures show.

Food inflation decelerated to 13.4% in July, down from 14.6% in June – the third consecutive slowing and its lowest level since December last year, according to the British Retail Consortium (BRC)-Nielsen Shop Price Index.

Overall, shop prices were 7.6% higher in July than a year ago, slowing from 8.4% in June, and also the lowest level this year.

Prices fell compared with June for the first time in two years.

BRC chief executive Helen Dickinson said: “Leading the cuts was clothing and footwear, where retailers mitigated wet weather with larger discounts.

“Food price inflation also slowed to its lowest level this year, with falling prices across key staples such as oils, fats, fish, and breakfast cereals.

UK food price inflation
(PA Graphics)

“These figures give cause for optimism, but further supply chain issues may add to input costs for retailers in the months ahead.

“Russia’s withdrawal from the Black Sea Grain Initiative and subsequent targeting of Ukrainian grain facilities, as well as rice export restrictions from India, are dark clouds on the horizon.

“We expect some global commodity prices to rise again as a result, and food prices will be slower to fall.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “The summer holiday period should help discretionary spend a little and, whilst inflation remains high, the outlook is improving.

“Shoppers continue to change how they shop as part of their coping strategies. This includes shopping at different retailers, buying lower priced items, delaying spend or only buying when there are promotions.

“This behaviour looks set to continue.”