Food prices have dropped for the first month in more than two years, according to an industry lobby group that says food inflation is now in single digits.

The British Retail Consortium (BRC)-NielsenIQ Shop Price Index found food inflation eased to an annual rate of 9.9% in September, which is down from 11.5% in August.

That’s its lowest point since August last year.

The BRC credited stiff competition between its supermarket membership for the 0.1% fall in costs it registered early last month compared to August.

Overall shop price inflation decelerated further to 6.2% in September, the index said.

Helen Dickinson, the BRC chief executive, said it expected “shop price inflation to continue to fall over the rest of the year”.

“However there are still many risks to this trend – high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine,” she added.

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“Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills.”

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People who bought dairy, margarine, fish and vegetables would have seen lower prices than in August, with cheaper school uniforms and other classroom essentials too.

Fresh food prices are now 9.6% higher than a year ago, down from 11.6% last month, and its lowest rate since last July.

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Head of retailer and business insight at NielsenIQ, Mike Watkins, said slowing inflation is “good news”, but warned there is still pressure on household budgets.

“So, it will be important for retail sales to keep momentum, which means we can expect more price cuts and increased promotional activity across all retail channels,” he said.

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