Food inflation has slowed in September for the first time in six months, the British Retail Consortium (BRC) has said.

Overall shop price inflation rose by 3.6 per cent in September, compared to 3.8 per cent in August, while food inflation subsided to 9.1 per cent from ten per cent last month.

Stephen Robertson, BRC Director General, said: “Both food inflation and overall shop price inflation have slowed, while some non-food items including clothing and electricals, are cheaper than they were last year.”

Mike Watkins, senior manager of retailer services for Nielsen, said: “Shop price inflation in food stores has now peaked but shoppers continue to make savings when shopping for food and they will remain cautious for the rest of the year.”

The reduced rate of overall price growth is down to the slowing of food inflation, the BRC said.

“The overall retreat in the year-on-year rise in the shop price deflator in September boosts hopes that inflationary pressures have peaked, although the Bank of England will note that non-food prices are still creeping up,” Howard Archer of Global Insight said.

Although it may be too soon to claim inflation has peaked, the Bank of England moved today to slash interest rates by 0.5 per cent in response to the escalating banking crisis.