The growth in shop prices stalled in September, indicating that inflation may have peaked.

Store prices remained unchanged last month, taking the annual rate of shop price inflation to 3.6 per cent, down from 3.8 per cent in August, figures from the British Retail Consortium (BRC) show.

September's rate was driven by a sharp slowdown in rising food prices, with fresh food falling in cost by 0.2 per cent during the month, pushing the annual inflation rate to 10.7 per cent, down from 11.9 per cent in August.

The BRC said that falling commodity prices had eased the pressure on producers and allowed retailers to lower their prices.

Other types of food, such as cereals and tinned produce, fell in price by 0.3 per cent last month, pushing the annual rate of inflation down from 7.3 per cent to 6.7 per cent.

The BRC report was published before today's emergency co-ordinated action by the world's central banks to cut interest rates but the Bank of England's Monetary Policy Committee (MPC) would have had access to the official inflation figures, which will be released publicly next Tuesday and are expected to show that inflation rose to more than 5 per cent in September.

The MPC would have noted that the BRC found the price of non-food items rose by 0.1 per cent during the month, with DIY, gardening and hardware items rising by 0.4 per cent, adding to the pressure on it to cut rates a day earlier than was expected.

Julian Jessop, chief international cconomist at Capital Economics, said: "Today’s co-ordinated half point rate cuts from all the major central banks, except Japan, where rates were already just 0.5 per cent will provide at least a temporary boost to confidence but we fear that there is still a lot more work to do.

"For a start, the fact that the central banks have had to take such extreme measures underlines how bad market conditions have become. What’s more, the Fed had already cut rates from 5.25 per cent in September last year to just 2.0 pre cent before today’s move without rescuing either the financial system or the real economy.

"Another half-point alone will not make much difference and indeed will not even be enough to offset the rise in market interest rates over the last few weeks. We expect today’s moves to be the first in a series — whether coordinated or at scheduled meetings — with rates eventually falling to 2.5 per cent in the UK, 2.0 per cent in the eurozone and just 0.5 per cent in the US."

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