The price of everyday items in shops has fallen at its fastest rate since 2006, with competition to attract customers hotting up on the high street.

The British Retail Consortium (BRC) said prices slumped 1.8 per cent in June compared with the same month last year.

It was the biggest annual drop since the BRC started collecting data in 2006 and the 14th consecutive drop in prices.

Non-food items fell fastest, down 3.4 per cent in June, while food products increased by an annual rate of 0.6 per cent, the slowest figure since BRC record began.

BRC director-general Helen Dickinson said: "Fierce competition among grocers has driven food price inflation to record low levels and with some grocers having announced plans to keep prices down, consumers stand to benefit for a while to come.”