Food price inflation, which has been rising since the start of the year as farmers marked up prices to counter the weak pound, eased in April for the first time this year, according to figures from the British Retail Consortium (BRC).

The year-on-year rise in overall prices - food and non-food - retreated from 2 per cent in March to 1.4 per cent in April. Annual inflation last fell in December to 0.5 per cent when VAT was cut.

The BRC said the marked slowdown in year-on-year inflation was the result of extra price cutting on the high street to drive Easter sales of food and non-food items and an easing of the cost to grocers of buying produce as the pound recovered some value.

Food prices fell by 0.3 per cent month-on-month in April, causing the year-on-year increase to retreat to 7.9 per cent from 9.0 per cent in both March and February. The BRC indicated that the recent rise in sterling from its lows helped to relieve the upward pressure from food prices. Meanwhile, the year-on-year fall in non-food prices widened to 1.9 per cent in April from 1.5 per cent in March.

Howard Archer of Global Insight said: "The Bank of England will be reassured that inflationary pressures are waning. Consequently, it seems set to keep interest rates down at 0.5 per cent well into 2010 and it appears to have scope to extend its quantitative easing programme should it deem it appropriate to do so."

Meat and some vegetable prices continue to come under pressure from currency effects, but the BRC said inflation more generally had been helped by a slight recovery in the pound.

Stephen Robertson, director general of the BRC, said: “With food cheaper than a month ago, the worst of food price inflation may be over, thanks to a more stable value for the pound. But rising farmgate prices for meat and some vegetables are the main factors working against retailers’ attempts to keep overall shopping bills down.”

Farmers have been increasing their prices to maintain parity with world levels, which has provided a boost to their margins. However, the BRC said conditions were changing as the recession took its course. “We expect that food inflation will continue to slow as sterling appears to have stabilised, grocers renegotiate contracts and continued weakness in the economy spurs on competition in the grocery market,” it added.

Clothing and footwear saw the biggest price falls in the non-food sector, down 7.1 per cent on a year ago, while electricals dropped 3.9 per cent.

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