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Food inflation falls to three year low

The British Retail Consortium (BRC) has today confirmed that UK food inflation has fallen to its lowest level since 2006 with prices increasing by just 1.2% last month. This will come as welcome news to UK consumers who have seen their budgets stretched to the limit over the last two years at a time when job security has also been foremost in the minds of many.

It is unclear as to whether this trend in reduced growth in food prices will continue throughout 2010 but one thing is clear, there is downward pressure on UK food prices and indeed non-food prices as well. The only potential fly in the ointment could be the cost of oil which continues to push further and further ahead and will continue to be reflected in the ever-growing cost of fuel in the UK.

Only a few weeks ago it seemed that inflation may well rear its ugly head again but if today's news is anything to go by the threat of deflation could be more prominent in the months ahead. Economic indicators regarding the UK seem to be changing on a daily basis at the moment although the vast majority would appear to be pointing towards a sustained recovery across the UK business. Whether this will be enough to save Gordon Brown at the next election remains to be seen.

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