British retail inflation grew at its slowest pace for a year in November, held back by supermarket discounts at the start of the crucial Christmas shopping period, a survey showed on Wednesday.
Shop price inflation fell last month to 2.0 percent year-on-year from 2.1 percent in October, its lowest level since November 2010 and well down from a peak of 2.9 percent reached in June.
The British Retail Consortium (BRC) said food inflation fell to 4 percent from 4.2 percent, in a rare positive sign for hard-pressed families struggling to cope with weak wage growth, higher energy bills and worries about the economic outlook.
Inflationary pressures are easing, said BRC Director General Stephen Robertson. The supermarket price war has helped reduce food inflation.
The Bank of England, which holds a rate-setting meeting on Thursday, forecasts that inflation, which is running at more than double its 2 percent target, will fall back sharply next year.
With consumers keeping a close eye on their budgets, stores have absorbed some of the higher costs from their suppliers as well as bigger energy and distribution bills, the BRC said.
Nielsen, the research company which compiles the monthly survey with the BRC, said shops' discounts were offset by a continued fall in consumers' spending power as other household bills rise.
It's been a slow start to Christmas trading, said Mike Watkins, senior manager in retailer services at Nielsen. Many retailers have reduced prices further in recent weeks to help boost footfall and spend in store.
Electrical goods, and clothing and footwear saw the biggest price falls compared to a year ago, the survey showed. Health and beauty, and home improvements, gardening and hardware had the highest levels of retail price inflation in the non-food category.
Non-food inflation was steady at 0.8 percent in November.
The BRC said it expected retail inflation to continue to ease because many commodity prices are lower and the government had postponed a fuel tax rise planned for January, taking some of the pressure off consumers.
(Reporting by Peter Griffiths)