UK Food inflation dropped dramatically in the month of March to the lowest levels in past three years, according to the figures released by British Retail Consortium. The latest Nielsen shop price index of British Retail Consortium showed that the food prices were reported up by 1.2% compared to the prices in the same month last year. The non food inflation was also reported down in the month of March.

Food price inflation dropped to 1.2% last month, decreasing by 0.1 percentage point while it was reported of 1.3% in the month of February this year. The decline in food inflation in March was partly attributable to the downward price pressures on vegetables. The food inflation levels in the month of March were reported the lowest since British Retail Consortium started its survey in December 2006.

BRC said that the non food inflation was also reported down in March. This was the first decline in non food inflation since VAT returned to 17.5% level on 1 January 2010.

According to BRC-Nielsen survey, the ambient food prices were reported of 2.2% in March, decreasing by 0.2 percentage points compared to February. The annual commodity price of corn and wheat were reported down by
7.1% and 8.6% respectively. The survey showed that the inflation in the breads and cereals category was reportedly unchanged in the month of March.

The Nielsen Shop Price Index also showed that the overall shop price inflation dropped to 1.2% in March, compared with 1.7% in the month of February.