UK shop prices have seen a significant decline, reaching a three-year low in October, according to the British Retail Consortium (BRC).

Shop price deflation dropped to 0.8%, marking the eighth decrease in nine months. While food prices rose by 1.9%, non-food items continued to experience deflation at 2.1%. Clothing prices increased for the first time since January as retailers reduced heavy discounting.

BRC chief executive Helen Dickinson warned that this trend could be affected by geopolitical tensions, climate change impacts on food supplies, and new government regulations. Concerns are growing ahead of the budget announcement, which may include an increase in social security contributions for businesses. Dickinson called for a reduction in business rates for retailers, as the retail sector is already paying a significant amount of taxes.

Consumer price inflation fell to 1.9% in September, with expectations that the Bank of England may cut borrowing costs in November.