Food inflation fell to 11.5% from 13.4% in July.
Annual shop price inflation cooled to 6.9% in August, the BRC said, weakening from 7.6% in July.
This was driven by falling food inflation, which fell to 11.5% from July's 13.4%, particularly for fresh produce such as meat, potatoes and some cooking oils.
UK retail sales dampened by wet weather
These figures would have been lower still had the government not increased alcohol duties earlier this month, the BRC highlighted.
Non-food inflation held at 4.7%, with toiletries and cosmetics seeing price growth ease as many key components became cheaper, while inflation for clothing and footwear increased as retailers unwound their extensive summer sales.
Mike Watkins, head of retailer and business insight at NielsenIQ, said the unpredictable weather of recent weeks «has dampened consumer demand».
Also some high street retailers are «increasing promotional activity and food retailers [are] continuing to extend price cuts, as the inflationary pressure coming from supply chains continues to lessen», he said.
Core inflation remains 'stubborn' despite falling headline figure
An NIQ survey found 60% of households expect to be «severely» or «moderately» impacted by rising household costs in the coming months.
«Once back from summer holidays, we expect consumers to remain cautious about discretionary spend even as inflation decelerates,» Watkins said.
The BRC's inflation measure captures prices of goods sold in store and is seen as an early signal for the broader official consumer prices index, which has fallen from a peak of over 11% last October to 6.8% in July.
However, inflation remains more than three times the BoE's 2% target and investors expect a 15th consecutive increase in
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