Shop price inflation slows to 1.8% in May, with clothes and electrical cheaper than last year, as retailers try and encourage shoppers to spend.
Overall shop price inflation slowed to 1.8% in May from 2% the previous month, with non-food inflation at 1.6% from 2% in April. The drop in figures come despite significant rises in operational costs. Food inflation however, saw an increase to 2.2% in May from 2% in April, according to the BRC-Nielsen Shop Price Index.

British Retail Consortium director general Stephen Robertson commented on the figures: "In May, overall shop price inflation slowed with the previous month, despite big rises in some costs.

"Past rises in the price of oil continue to put pressure on transport costs. International shipping prices are up over a third...But clothes and electricals are cheaper than they were last year, as retailers hold prices down in the face of customers' reluctance to spend.

"With margins already being squeezed, a VAT increase would be an inflationary pressure too far."

Nielsen senior manager of retailer services Mike Watkins added: "Shoppers continues to be price-aware and weak demand has not helped no-food retailing where we have seen more discounting and bigger price reductions - all of which can be expected to continue on the high street for the immediate future."