Prices in the shops fell between May and June, according to the British Retail Consortium, relieving some of the pressure on family finances.

The industry group’s shop price index showed average costs on the high street dropped 0.2pc in the month.

It means that prices last month were up by 0.2pc compared with June of last year, on the BRC’s measure. That marks the slowest pace of inflation since October 2021, before the cost of living crisis really erupted and forced the Bank of England to raise interest rates from 0.1pc to 5.25pc in an effort to get on top of spiralling living costs.

The easing in prices will boost hopes that the Bank of England can press ahead with cuts to interest rates later this year without fuelling another inflation crisis. 

Food prices are up 2.5pc on the year, while other goods on average cost 1pc less than they did in June 2023.

Helen Dickinson, chief executive of the BRC, said that companies worked hard in the pandemic and the energy crisis to cut costs.

“During the height of the cost of living crisis, retailers invested heavily in improving their operations and supply chains to compensate for the impact of global shocks on input costs. This is clearly paying off,” she said.

“Food inflation is now lower than any time since 2021 helped by falling prices for key products such as butter and coffee.

Meanwhile, non-food prices went deeper into deflation as retailers tried to drive sales by discounting. This was particularly true for TVs with great deals to capitalise on the Euros fever.”

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