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The deflation that has gripped grocery since 2014 has eased for the second consecutive month after the Brexit vote.

The Grocer Price Index, which measures over 60,000 SKUs across the big four supermarkets, found annual deflation moved to -2.36% in the month to 1 August from -2.77% in the month to 1 July.

The latest figure represents the lowest level of annual price cuts so far in 2016 and is around 0.7 percentage points lower than the -3.07% recorded in the month to 1 June.

On a month-on-month basis six of the 14 categories returned to inflation. The biggest category mover was dairy, with prices 3.1% higher across the big four and annual deflation fell from -4.8% in the month to 1 July to -3.5% last month. Monthly prices were also up in soft drinks (+1.7%), health & beauty (+1.6%) and fruit & veg (+0.9%).

Click here to read the full GPI breakdown.

Morning update

It’s another quiet August morning on the markets as the holiday season is in full swing.

The FTSE 100 has started the week on the front foot, edging up 0.14% to 6,868.8pts so far this morning.

Ocado (OCDO) has leapt 4.7% to 293.1p so far this morning. Other risers include Real Good Food (RGD), up 1.8% to 33.6p, Conviviality (CVR) up 1.6% to 224p, WH Smith (SMWH), up 1.6% to 1,575p and McColl’s (MCLS) up 1.3% to 167.9p.

Fallers include C&C Group (CCR), down 2.6% to €3.76, PayPoint (PAY), down 1.3% to 992p and Majestic wine (WINE), down 1.1% to 419.8p.

This week in the City

There’s not too much in the financial calendar this week, but the market share figures from Kantar Worldpanel and Nielsen tomorrow morning will generate plenty of interest – particularly after Asda posted the worst quarter yet recorded by one of the big four last week after its second quarter sales slumped 7.5%.

There’s not too much in the diary in terms of company announcements, though WH Smith (SMWH) will issue a pre-closing trading update on Wednesday. Away from the UK, newly merged Ahold Delhaize will issue its second quarter figures on Thursday, while Australian food retailer Woolworths will issue its preliminary full-year results late on Wednesday.

In economic terms, the CBI Industrial Trends Surveys for August will be issues at 11am later today, while the final official estimate of Q2 GDP growth data comes on Friday.

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