Food prices fell to a three-year low last month, driving down overall shop price inflation and giving a boost to hard-pressed shoppers.

The British Retail Consortium-Nielsen Shop Price Index revealed yesterday that the annual rate of food inflation in February fell to 1.3 per cent – the lowest since the survey started in December 2006, and less than half the 2.9 per cent annual rise in January.

"Food inflation is now at its lowest for at least three years – 12 months ago it was seven times higher," said the BRC director general, Stephen Robertson. "This drop has largely been driven by falling fresh food prices, mainly vegetables and fish.

"Previous falls in the value of the pound and large commodity price increases, which were pushing up food prices, have largely worked through. Barring any lasting shocks, the price of food should continue to be relatively stable for some time."

Overall annual shop price inflation came in at 1.7 per cent in February, which was down on the previous month's 2.3 per cent, the survey found. Non-food shop prices flatlined at 1.9 per cent in February.

Mr Robertson warned that the rise in VAT to 17.5 per cent was putting pressure on shop price inflation. But he said electricals, entertainment and clothing products were cheaper than they were at this time last year.

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