Great news for customers!
Food inflation figures are the lowest since 2006 with kitchen must haves such as milk, cheese and eggs at an all-time low.
British Retail Consortium and Nielsen released figures that showed food inflation went up by just 0.1% in October following the previous three months at 0.3%. This is the lowest recorded rate in 8 years.
For the first time since February 2010, there has been a deflation on everyday items such as milk, cheese, eggs, vegetables and convince food- all of which are cheaper than they were just a year ago.
Britain’s big four competitors in the grocery area - Tesco, Sainsbury’s, Morrisons and Asda - have all had to cut prices to compete with German supermarkets Aldi and Lidl, who have some very strong advertising campaigns on TV right now. Consumers are benefitting from being able to hunt for the best bargains in food items.
The 'big four' have slashed the price of milk for example to get customers in, four pints now typically costs £1, while in Iceland it is even cheaper at 89p.
Helen Dickinson, BRC director general, said: 'With the current competitive environment, retailers are passing most of these savings onto consumers and as Christmas swiftly approaches, there is plenty of evidence to suggest that budgets will go a little bit further this year.'
The Barclaycard Quarterly Spend Report, revels that UK consumer spending grew by 4.2 per cent last quarter.
Chris Wood, managing director of Barclaycard, said: 'There is a new era of financial awareness among consumers and the search for value appears to be entrenched.
'The full benefits of the economic recovery are still to be felt by many, and this ‘new normal’ looks set to continue.
'Most consumers are still feeling the pinch, so they’re holding back spending and, while they do, we’re yet to see a full-blown recovery.'
While the big four continue to try and outdo one another- non-food deflation slowed down to 3.1% in October from 3.2% in September according to the BRC.
The search for the biggest bargain is now more important to customers than ever, especially where food is concerned, while people try to feed thier families on tight budgets. +2
Commenting on the figures, Chris Williamson, chief economist at Markit, said that CPI has not been as low for a decade- the last time is what this low was October 2004.
Mr Williamson said: 'With oil and petrol prices falling, import costs dropping due to the exchange rate, supermarkets engulfed in price wars and wage growth at a record low, it's hard to see why inflation should do anything other than fall further in coming months.
'While a few months ago, the likelihood was growing that the Bank might need to hike interest rates in late 2014 or early next year, the data are now stacking up to suggest a hike could be delayed at least until next summer, after the general election.'
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