Shop prices have increased for the fourth month in a row, despite a period of post-Christmas discounting, according to new data.

The British Retail Consortium (BRC)-Nielsen Shop Price Index showed throughout January, shop prices increased by 0.4% - up from 0.3% in December - marking the highest inflation rate since April 2013.

Fresh food inflation accelerated to 1.2% in January, up from 0.9% in December, while ambient food inflation slowed to 1.9% in January, down from 2.3% in December.

Non-Food deflation continued to decelerate, with prices falling by 0.3% in January, compared to a 0.4% decline in December - the lowest rate of deflation since March 2013.

BRC chief executive, Helen Dickinson OBE, said inflation would only be a concern over the coming months in the event of a no-deal Brexit. 

“Despite significant post-Christmas discounting, shop prices in January were slightly up on last year,” she said.

“Promotions have become the norm in recent years, but it was never going to be possible to continue making seasonal price cuts deeper each year; especially given that the cost of importing many of the goods we buy increased with the post-referendum fall in the pound.

“Consumers have little to fear in terms of inflation over the coming months with many of the underlying pressures on prices easing. That is unless the UK leaves the EU without a deal on the 29 March, leading to increases in the price of many goods in the weekly shopping basket.”

Nielsen head of retailer and business insight, Mike Watkins, said: “With shoppers looking to make savings on household bills and sentiment on the turn, it’s good news that shop price inflation is broadly unchanged this month.

“Intense price competition between food retailers at the start of the year is protecting customers from rising prices and there is no inflationary pressure coming from the high street as retailers, faced with weak demand, continue to absorb the impact of any rising costs themselves. The retail outlook is for low growth over the next couple of months and for shop price inflation to remain at around current levels, and less than CPI.”