Overall shop price inflation fell to an 0.6 per cent year-on-year rate in January from 1.5 per cent in December, the lowest shop price inflation since November 2009, when it was 0.2 per cent, according to the latest data from the British Retail Consortium (BRC).

Food inflation fell to a 4.0% year-on-year pace in January from 4.1% in December.

Non-food prices fell by 1.4% in January after being broadly flat in December.

Helen Dickinson, British Retail Consortium Director General, explained that: "The significant year-on-year fall in non-food prices was driven by cheaper clothing and electricals. Promotions were not as widespread as last year, a higher proportion of goods was sold at full price boosting sales figures but, where discounts were applied, they were deeper.

"Offers are common at this time of year, as retailers clear stock to make way for spring and summer ranges, but we've not seen non-food fall this quickly since September 2009.

"Weak demand for clothing necessitated big price cuts. Clothing prices were down 7.7% on the year before, their biggest drop in the six years of this survey. But clothing suffered its worst sales fall since last Easter.

"Food inflation was marginally down on the previous month, a reflection of easing commodity costs filtering through and better fresh food prices. There is some volatility in the system but, barring any major shocks in the supply chain, I still expect stable food inflation as the year goes on."

AB

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