Ministers risk prolonging food inflation pain for shoppers, supermarket chiefs have warned, as retailers brace for a rise in wage costs and tax bills. 

Shop price inflation fell to its lowest level since May 2022 in January, according to new figures from the British Retail Consortium (BRC), slipping from 4.3pc in December to 2.9pc. 

It followed a slowdown in the pace of price rises for both groceries and non-food items, such as clothes and electronics. 

Helen Dickinson, chief executive of the industry group, said: “Many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.” 

However, retailers warned that ministers risked stoking the flames of inflation with unhelpful policies. 

The BRC said progress on bringing bills down for shoppers “will likely be hampered by new cost pressures coming directly from the government”. 

This includes an upcoming increase in the minimum wage, which will see low-paid workers handed a 10pc pay rise from £10.42 to £11.44 an hour from April. 

At the same time, retailers are facing an above inflation rise in business rates. The government is also considering proposals that would stop retailers being able to charge for taking customers’ unwanted goods to be recycled. The BRC dubbed the plan “ill-conceived”. 

Read the latest updates below.