The British Retail Consortium's shop price index suggests that high street prices during December were the same as those for November.

This is the result of a slight decrease in the price of food items balanced against the slight increase of the price of non-food items.

The yearly trend indicates that prices were up by 0.99 per cent in December 2002, in comparison with prices in December 2001. However, in money-terms, shop prices remain lower than they were five years ago and are still well below the RPIX's three-month average between September and November 2002 of 2.4 per cent.

The BRC's director general Bill Moyes commented: 'Fierce competition for every customer at a time of slowing consumer spending and the consumer's relentless drive for value has translated into stable prices which pose no inflationary threat.

'The message of these figures to the MPC is clear. There is no danger of inflation. They have the room needed to make a cut in rates and if they want to see a continuing moderate growth in consumer spending in 2003, it is a cut they need to make.

'The message to the government is just as clear, the sector's margins are tight and if they want a continuation of the sector's impressive record on investment and job creation, they must work to tackle the growing burden of impressive costs.' Food prices have risen faster over the recent past, but in December they fell modestly by 0.19 per cent on the previous month. This reflected some pre-Christmas offers. Notable price decreases were seen for carrots, but by contrast the price of beef rose in December. Compared to a year ago, food prices were up two per cent – the strongest year-on-year rate since July.