By Marcus Leach

Overall shop price inflation remained at 2.7% in September according to the British Retail Consortium's (BRC) shop price index.

Food inflation was unchanged at 5.0%, while non-food inflation fell to 1.3% in September from 1.4% in August.

"The pressures on prices from world commodities, import inflation and January's VAT rise haven't gone away but they haven't worsened either," Stephen Robertson, BRC Director General, said.

"Shop price inflation is stable and well below the Consumer Price Index (CPI), the Government's official measure of inflation.

"The Bank of England expects CPI to go on rising but that's due to things like utilities, petrol and insurance not shop prices. In fact some goods — clothing and electricals — continue to be cheaper than a year ago as retailers discount aggressively to produce sales and stay in business.

"Fundamental conditions are unlikely to change much this side of Christmas but next month we'll see what effect the supermarket price war - based on straight price cuts rather than other forms of promotion — is having on food inflation."

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