A long period of falling shop prices is almost over as inflation squeezes retailers' margins, making price rises "inevitable", the British Retail Consortium has warned.

Shop prices fell 0.3pc in June compared to a year ago, according to the BRC-Nielsen Shop Price Index, but this was the shallowest level of deflation since November 2013.

Helen Dickinson, chief executive of the BRC, said that the data showed the UK retail sector had “edged” towards “ending a four-year deflationary trend”.

She warned that shops could only absorb the impact of inflation on their profit margins for so long and that price rises are “inevitable”.