Supermarket prices rallied this month, according to The Grocer Price Index.

The average price for our 100-item basket rose by 0.48% between September and October.

Industry initiatives to raise meat prices and increases in the cost of alcohol are helping to boost the growth.

But prices remain depressed in comparison to the surge in the summer months.

The latest price survey, conducted by ESA for The Grocer, shows strong deflation in the second half of 2005. The trend has been driven by fierce competition and the harmonisation process at Safeway and Morrisons Stores.

Fresh produce has been a core target for price cutting.

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