'Supermarket Price War' Helps Inflation Ease

Written By Unknown on Selasa, 17 Juni 2014 | 16.01

The first annual fall in food prices since 2006 has helped the rate of inflation tumble to a four-and-a-half year low of 1.5%.

The Office for National Statistics (ONS) said the dramatic easing in the annual rate of price growth in May, which was not forecast by economists, was possibly explained by a supermarket price war.

The major 'big four' chains of Tesco, Asda, Sainsbury's and Morrisons are scrapping for market share in a bitterly contested fight for business that has seen heavy discounters like Aldi and Lidl gaining ground.

The ONS charted an annual 0.6% fall in food prices in May.

It said a broad range of goods including drinks and clothing also fell in value.

The body credited the effects of a late Easter on travel costs fading as well.

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