Arsenal are moving towards a breakthrough in negotiations to sign Shkodran Mustafi, the Valencia defender, after Arsène Wenger admitted that his club must adjust to the reality of spiralling inflation in the transfer market.

It has so far been a frustrating summer in the transfer market for Arsenal and Wenger conceded yesterday that his prudent approach might have to give way to pragmatism before the August 31 transfer deadline. “We have to follow the prices paid by other people,” the Arsenal manager said. “That has gone up because the availability of money is much higher.”

Negotiations over Mustafi are progressing towards a deal in the region of £20 million after the Germany defender, 24, was left out of Valencia’s friendly against a Nigeria all-star team