This was against growth of 2.4% in June, and below the three-month average of 2.4%.

However, fresh food inflation increased to 3.1% year-on-year in July, against growth of 2.8% in June. This was in line with the three-month average of 3.1%.

After achieving growth of 1.9% in June, ambient food inflation decreased to 1.1% year-on-year in July, which was below the three-month average of 1.6%.

“While today’s figures are encouraging, growing cost pressures remain on the horizon.”

Helen Dickinson, chief executive of the BRC, stated: “Good news for households in July as shop price inflation slowed. Retailers competed hard to limit price rises, with a wave of summer promotions across food and other goods. Shoppers benefited from deals on snacks and alcoholic drinks during the football World Cup.

“While today’s figures are encouraging, growing cost pressures remain on the horizon. Higher employment costs and packaging taxes, global instability and climate-related disruption all make it more expensive to get products onto shelves. The best way to keep the cost of living down is to keep the cost of doing business down. Cutting unnecessary taxes and levies on energy bills would help retailers keep prices low, invest locally and support jobs in every town and city.”

Mike Watkins, head of retailer and business insight at Nielsen IQ, said: “Shop price inflation remains lower than a year ago, which will help shoppers as they manage other increases in household spend, such as energy and fuel. So, we can expect promotions to continue to be an important part of driving demand for the rest of the summer.”