Overall shop prices reported deflation for the eighth consecutive month in December, slowing to 0.8 per cent from 0.3 per cent in November, says the British Retail Consortium-Nielsen.
This is the lowest level of deflation since the series began in December 2006.
Food inflation slowed to 1.7 per cent from 2.3 per cent in November. Non-food reported annual deflation of 2.3 per cent in December from 2.0 per cent in November.
British Retail Consortium director deneral Helen Dickinson said: "This is the lowest inflation rate since we started compiling the index in 2006, and the eighth consecutive month of falling shop prices.
"Non-food prices fell further in December, reflecting the widespread promotional activity as retailers competed for all-important Christmas custom.
"Many categories remained deflationary, while prices fell for books, entertainment and home improvement products to attract shoppers preparing for the festive break.
"It’s also worth noting that ‘Cyber Monday’ fell in the period covered by the index, so discounting was particularly commonplace, with many retailers offering to match or beat offers found elsewhere."