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An uptick in global food commodity costs pushed up UK food prices in March Reuters

Food prices in Britain saw their biggest increase in three years in March while overall shop prices fell at a slower rate compared to the previous month, a survey has shown.

The British Retail Consortium (BRC) said food prices increased 1% from a year earlier in March, the fastest rate of increase recorded since February 2014.

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However, overall shop prices continued on a deflationary trend as they fell 0.8% year-on-year following a 1% fall in February – the 47th consecutive month in which prices have fallen.

BRC chief executive Helen Dickinson attributed the rise in food prices to an uptick in global food commodity costs.

"Although UK food shop prices are seeing their steepest rise this month for over two years, the increase is still only one per cent, reflecting the continuing intense competition between retailers," she said.

"The limited increase is even more impressive, given the magnitude of the devaluation in sterling."

Fresh food prices increased 0.9% in March following a 0.1% increase in February, while the non-food deflation rate accelerated to 2% from 1.8%.

Dickinson added that the continued deflationary trend in non-food prices was good news for consumers.

"Customers have now had the benefit of four years of non-food price deflation," she said. "The squeeze on household disposable incomes will tighten as the year progresses.

"Looking ahead, ensuring the continuation of value for consumers through tariff-free trade must be at the heart of plans for a smart Brexit."

Mike Watkins, head of retailer and business insight at Nielsen, said: "Inflation is gaining momentum across the economy but in food retailing, the cost price increases being passed onto shoppers in March was lower than the consumer price index.

"We anticipate this trend to continue over the next few months. If so, this would be good news for shoppers managing household budgets when prices are rising faster elsewhere and with Easter falling later this year, it may help overall retail sales growths."

The UK's official inflation rate stood at 2.3% in February, up from 1.8% in January. It is expected to climb further in the coming months as the weaker pound pushes up import prices.