Overall shop prices reported deflation of 1.6% in July from the 2% decline in June, as competition between retailers drove prices down.

According to latest BRC–Nielsen Shop Price Index, furniture and floorcovering prices decelerated to 0.8% from the 2.5% decrease in June, the third weakest deflation rate in the last year.

Deflation in the DIY, Gardening and Hardware category accelerated to 2.6% from the 2.0% fall in June. This is the deepest deflation rate since February.

Overall non-food deflation decelerated to 2.2% in July from 2.8% in June.

Helen Dickinson OBE, chief executive, British Retail Consortium, said: “The long stretch of deflation continued in July with shop prices falling once again. This is testament to the strength of competition between retailers, which is as fierce as it has ever been.

“While we may have become accustomed to prices falling, it’s worth noting that this month’s figures have seen the rate of deflation decelerate. Total price falls have slowed to -1.6% from June’s -2%. It’s too early to say if this is the beginning of the end of sustained price deflation or whether pressures in the wider economy could merely mark the end of the beginning.”