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Prices continued to fall in November marking the sixth consecutive month of decline

UK shop prices declined for the sixth consecutive month in November, amid a fall in dairy prices and easing fresh foods inflation.

Shop prices reduced 0.5% year on year, according to data from the BRC-Nielsen shop price index covering the period from 4 to 8 November.

This was below the 12-month average 0.1% increase and six-month average decrease of 0.4%. In October, prices had fallen 0.4%.

“With fragile consumer confidence, retailers are keeping price increases to a minimum to encourage consumers to spend and there is little inflationary pressure coming from the high street,” said Mike Watkins, head of retailer and business insight at Nielsen.

“With Black Friday discounts and promotions already giving shoppers further savings, any new pricing initiatives to drive demand in the final weeks up to Christmas will need to be balanced to protect margins.”

Food inflation eased to 1.4% in November, from 1.6% the prior month.

Fresh food inflation decelerated to 0.6% from 0.8% in October. This was mainly due to a “strong crop yield” for fresh fruits in the UK and a fall in dairy prices, said BRC CEO Helen Dickinson.

Ambient food inflation was 2.6% in November, a slight decline on the 2.7% of the previous month.

Dickinson added: “The economic and political uncertainty has weakened demand for non-essential items. As a result, retailers have pushed for even deeper price cuts to encourage consumers to open their wallets.

“While consumers will welcome the fall in prices in the run-up to Christmas, there are various factors which could push food prices up in the longer term. These include the impact of flooding on the yields of many root vegetables and the rising global prices of meat.”

However, she continued, the “biggest threat to future prices” remained increased import costs as a result of a no-deal Brexit.

“The next government should aim to provide clarity on the UK’s future relationship with the EU as soon as possible,” she said.