Inflation in food prices nudged up to 1.3% in the year to December, ending the prolonged period of deflation that dominated most of 1999 and 2000. The latest Retail Price Index figures show the food sector, primarily driven by fresh seasonal items, beginning to recover lost ground. Compared with the all items index of 2.9%, however, inflationary pressures in food remain very subdued. This is particularly true of the non-seasonal sector where the inflation rate ended the year at just 0.1%. Although a resurgence in the euro might cause some prices to rise, intense competition between major retailers continues to hold many in check. In the two months running up to Christmas, most mainstream groceries held steady. Beef and poultry prices fell around 4% against their October level, and tea and coffee eased around 2%, but most other staples such as bread, butter, cheese and soft drinks were unchanged. Year-on-year, there were gains averaging 3% in lamb, pork, bacon, fish and eggs, but these were offset by equivalent falls in beef, poultry, tea, sugar and preserves. Miscellaneous packaged products such as soups and desserts rose by 1%. Inflation in takeaway, restaurant and canteen prices continued to outpace food for home consumption, ending the year at 3.7%. Non-food broadly tracked the food sector with a modest rise of 1%. The major downward influence on the all items index during 2000 was consumer durables. Clothing, leisure goods and electrical appliances recorded falls of as much as 5%. {{NEWS }}