Studies show that the summer sales in the fashion retail sector, where stocks had to be reduced, led to a drop in prices in stores for the first time in three years.

According to the British Retail Consortium (BRC), prices were 0.3% lower in August compared to a year earlier, the first such decline since October 2021.

The price drop was driven by non-food items such as clothing and furniture, with retailers offering discounts after wet weather and ongoing cost-of-living pressures hit sales.

Food prices continued to rise, but at a slower pace, according to industry association BRC.

Inflation for fresh food such as fruit, meat and fish recorded its biggest monthly decline since December 2020 thanks to falling costs for suppliers, it said.

However, the BRC said non-food retailers had “applied heavy discounts to clear their summer stocks, particularly in fashion and homewares”.

“These price reductions followed a difficult summer of trading caused by bad weather and the ongoing cost of living crisis that affected many families.”

BRC chief executive Helen Dickinson said while households were “happy” to see falling prices for some goods, there was no guarantee the trend would continue.

“The outlook for commodity prices remains uncertain due to the impact of climate change on domestic and international crops, as well as rising geopolitical tensions,” she said.

“As a result, inflationary pressures could return next year.”

Lindsay James, investment strategist at Quilter Investments, said the wet summer weather had severely damaged clothing sales.

She told the BBC’s “Today” program that while there were “encouraging signs that inflation is coming under control,” the figures were also “a reminder that this economic recovery is fragile.”

According to the latest official inflation figures, which measure how fast prices are rising overall, the rate rose to 2.2 percent in July, the first increase this year.

The increase in July had been widely predicted and was due to the fact that the price decline in gas and electricity was less severe than in the previous year.

The Bank of England forecasts that the inflation rate will rise to around 2.75 percent in the coming months and fall below 2 percent next year.

Andrew Murphy, managing director of toy retailer The Entertainer, which has 165 stores in the UK, told the BBC that the cost pressures the company has faced over the past 18 months have “eased somewhat”.

However, he added that the biggest cost not related to the products purchased is wages, which have increased by about 10% this year due to the increase in the national subsistence level and “this value will continue to rise”.