The latest figures from the British Retail Consortium (BRC) trade body, which represents biggest retailers, showed that December’s figures matched November’s results, as the price increase on non-food items offset easing costs on food.

December’s results were still below the 15.7% peak recorded in April 2023.

Food specific inflation was 2.2% of the total figure and decreased to 6.7% year-on-year, down from 7.8% in November.

UK grocery inflation slows again as staple food prices drop for first time in a year

Non-food contributed to 2.1% of the headline figure and rose to 3.1%, up from 2.5% the previous month. However, this was still below the 12-month and six-month average price growth rates of 4.7% and 3.8%, respectively.

Fresh food inflation decelerated in December to 5.4%, down from 6.7%.

BRC CEO Helen Dickinson argued that households had “reason to celebrate as food inflation fell for the eighth consecutive month thanks to retailers’ efforts to bring down prices in the run-up to Christmas”.

“There was cause for merriment as prices of wine, port and sherry fell on the month. Non-food products had a more challenging December, with price inflation rising again following retailers’ investment in November Black Friday discounting and ahead of the January sales,” she said.

The BRC said inflation is expected to ease over Q1 2024, though certain categories will see more prolonged inflationary pressures, meaning inflation is therefore likely to fall slowly over the course of 2024 overall.

UK retail sales growth stunted by higher cost of living

In the report, the BRC said energy prices were having an impact on driving up some costs, as business input costs, as measured by producer price inflation (PPI) within the domestic supply chain, are likely to remain elevated, and upside risks remain in the price of oil.

Dickinson said that going in 2024 retailers would “continue to do all that they can to keep prices down, but there are obstacles in the road ahead”, with new border checks for EU imports coming into effect.

She called on the government to “think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities, but also push up prices for struggling households”.