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UK shop prices rise by least since December 2021, trade group says

FILE PHOTO: A customer carries a basket filled with food inside a Sainsbury’s supermarket in London

LONDON (Reuters) - Prices in British shops rose at the slowest pace in more than two years this month, the British Retail Consortium said on Tuesday, adding to signs of easing inflation pressures that will be welcomed by the Bank of England.

Annual shop price inflation slowed to 0.8% in April from 1.3% in March, the smallest increase since December 2021, the BRC said.

Prices for non-food goods fell by 0.6% in annual terms after a 0.2% rise last month, marking the first negative reading since October 2021.

"One year on from the peak, shop price inflation levels are showing signs of normalising, providing relief to households," BRC chief executive Helen Dickinson said.

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Food inflation slowed for a 12th month running to 3.4% from 3.7%.

"Fresh products such as butter, fish and fruits continued to fall in price due to easing input costs and intense competition between grocers," Dickinson said.

Bank of England interest rates currently stand at their highest level since 2008.

But with the broader measure of consumer price inflation forecast to fall to the BoE's 2% target during the current quarter, policymakers have rates under review for a possible first cut since the COVID-19 pandemic.

Financial markets do not expect such a move to happen until August or September.

(Reporting by Andy Bruce; editing by David Milliken)