June 2, 2015 / 11:03 PM / in 4 years

UK shop prices fall 1.9 percent on year in May - BRC

A woman carries shopping bags as she walks along Oxford Street in central London July 25, 2014. REUTERS/Neil Hall

LONDON, June 3 (Reuters) - Prices in British shops last month were 1.9 percent lower than a year earlier, the same rate of decline as in April when Britain’s overall inflation rate turned negative, the British Retail Consortium said on Wednesday.

The BRC said food prices fell 0.9 percent, also unchanged from April, although fresh food prices in particular plunged 1.9 percent, their sharpest fall since the survey started in 2006.

“Retailers continue to use price cuts and promotions to stimulate sales which is helping to maintain shop price deflation, and we see little evidence to suggest that prices will rise in the near future,” said Mike Watkins, head of retailer and business insight at survey compiler Nielsen.

The BRC figures show prices falling much faster than the broader consumer price inflation measure targeted by the Bank of England. The CPI includes faster-rising costs such as utility bills, entertainment, healthcare and university tuition.

Consumer price inflation fell below zero for the first time in more than half a century in April but BoE Governor Mark Carney said the dip was likely to be brief.

Reporting by Andy Bruce, editing by William Schomberg; andy.bruce@thomsonreutres.com; +442075423484

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