Consumers are facing further price hikes, with high oil and commodity costs pushing fresh food inflation into double figures during July.

Fresh foods were 10.8% more expensive last month compared to a year ago, according to the British Retail Consortium-Nielsen Shop Prices Index. The figure rose from 8.4% in June, and has more than trebled over the past 12 months.

The survey showed that annual inflation for all food was 9.5% last month, while ambient foods - such as tinned goods and other longer-lasting items - showed a 7.4% rise.

The BRC said the cost of oil had a direct impact on costs associated with packaging, storage and distribution. The price topped $147 (£75) a barrel in July but has since dropped back to below $120 (£61) this month. Higher costs for pork, margarine, cooking oils and fats also drove up in-store prices.

Stephen Robertson, director general of the BRC, said: "Overall food prices are rising but retailers are keeping increases well below the extra supply and operating costs they face.

"Falls in the prices of oil and some world food commodities, such as wheat and soya, provide hope but most retail costs remain sharply up on a year ago and are still rising."

The BRC has recorded overall inflation of 3.2%, the highest figure since the survey began in December 2006. The official inflation figure for July was 3.8% - also a series record.

Meanwhile, the cost of some non-food goods fell, the survey found, with retailers reducing prices to attract in hard-pressed shoppers struggling during the economic downturn. Clothing and footwear goods registered a reading of minus 2.7% in July, while the electricals sector reported minus 3.3%.

"Retailers are still discounting in order to drive sales in tough conditions," the BRC said. Consumers often use credit to purchase big-ticket electrical items, however, with credit turning increasingly scarce and more affluent consumers are cutting back on spending on credit cards."

Furniture and floorcoverings reported annual inflation of 2.5% in July, down from 3.3% reported in June. Retailers in the sector faced rising raw materials costs for goods such as timber, as well as rising manufacturing and processing costs.

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