Retail prices continued to fall in November, despite the heavy cost pressures on retailers.
Shop prices fell by 0.1 per cent in November, the shallowest rate of deflation recorded for the last four years, according to the British Retail Consortium (BRC).
Deflation in non-food retailers was 1.1 per cent, shallower than the 1.5 per cent recorded in October.
Food prices continued to rise, albeit at a lower pace. Inflation on food items slowed to 1.5 per cent, down from 2.2 per cent in October.
Mike Watkins, head of retailer and business insight at Nielsen said shoppers would welcome the ease in inflation on groceries ahead of Christmas.
"Many inflationary increases are still being absorbed by retailers and are not being passed on to the consumer in the form of higher prices," he said.
"Nevertheless, the deflation in non-food continues to overshadow the discounting and promotional activity taking place in this channel as consumers become more cautious and look for ways to save on their household bills.”
Helen Dickinson, chief executive of the BRC, said: "The lower projections for consumer spending, that came from the OBR's downbeat forecast last week, and uplifts in labour costs, conjure up a perfect storm of economic pressures looming over an industry that's already fiercely competitive.
"That's why we were pleased that the chancellor listened to us and others and brough forward the switch from RPI to CPI indexation on business rates - not the fundamental reform needed but an important step forward which will undoubtedly ease some of the pressure and enable retailers to continue with some investment which would otherwise have been threatened."
Today the Low Pay Commission recommended that the national minimum wage and national living wage increase by 4.7 per cent and 5.4 per cent respectively next April, which will be an additional cost for the retail industry.