Prices in UK shops are falling at the fastest rate since 2021 despite an increase in fresh food inflation as wet weather hit UK production while the cost of olive oil and sugary snacks continues to be affected by the climate crisis.

Overall shop price deflation was 0.6% in September compared with 0.3% in August, according to the latest figures from the British Retail Consortium (BRC) trade body.

However, that was led by reductions on non-food items – especially clothing and furniture – amid low demand because of unseasonal weather and a squeeze on household budgets from high bills on essentials including energy and groceries.

Fresh food inflation increased to 1.5% from 1% in August as the wet weather affected British production of salads and soft fruit while storms in the Atlantic delayed imports of more exotic fruits, driving up prices. Hefty price rises for olive oil, which is counted as fresh produce in the BRC survey, underpinned the rise.

Olive oil is now more than £9.12 a litre on average – up 42% year on year, according to the latest figures from the Office for National Statistics – amid a drop in global production to the lowest level in more than a decade.

Greece, Morocco and Turkey have produced less as part of the natural cycle of olive growth, while in Spain and Italy, trees are suffering from extreme heat and drought and attacks by pathogens as the climate crisis wreaks havoc on harvests.

Packaged food price rises remained high at 3.3% in the year to September amid hefty price rises in cocoa and sugar.

Helen Dickinson, the chief executive of the BRC, said: “September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation.

“Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months. This was driven by non-food, with furniture and clothing showing the biggest drops in inflation as retailers tried to entice shoppers back.

“Easing price inflation will certainly be welcomed by consumers, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend.”

She called on the government to take “decisive action” on business rates – a big cost for retailers with physical shops – in the budget on 30 October, saying the industry “faces a disproportionate tax burden” compared with other industries.