Competition in the UK retail space forced shops to cut prices for the fifteenth consecutive month in July, the industry’s biggest membership group has said.

Price deflation accelerated to an annual rate of 1.9 per cent last month, the fastest rate of decline since records began in 2006. Non-food items were 3.3 per cent cheaper than this time last year, while food products slipped 0.3 per cent.

Helen Dickinson, director general of the British Retail Consortium (BRC) said it was good news for consumers but that trading conditions for businesses remained “challenging” with costs rising as prices fall.

She said: “Structural changes in retail are challenging existing business models which in many cases are squeezing margins while other costs, such as business rates, continue to rise.

"While we know retailers will be working hard to sustain low prices, continued support from Government will be key to maintaining a sustained recovery in the economy."