INFLATION in shop prices has returned for the first time in almost a year, according to new figures.

Prices were 0.4 per cent higher in June than a year ago, up from a 0.1 per cent decline in May, the British Rail Consortium (BRC)-NIQ Shop Price Index shows.

Food price inflation rose sharply to 3.7 per cent in June, compared with 2.8 per cent in May. 

Prices of fresh food were up 3.2 per cent year on year, driven by rising meat costs due to higher wholesale and labour expenses and increased fruit and vegetable prices after harvests were reduced by hot, dry weather.

Non-food goods remained in deflation, with prices 1.2 per cent lower than last June. However, this marks a smaller drop than May’s 1.5 per cent, as retailers slashed prices for items such as DIY and gardening goods.

BRC chief executive Helen Dickinson said: “Within three months of the costs imposed by last autumn’s Budget kicking in, headline shop prices have returned to inflation.”

Mike Watkins of research firm NielsenIQ said broader economic pressures and supply chain problems were behind the increases. He warned that higher prices could hurt spending later in the year.