Supermarket price cuts give shoppers some relief on the food run

Supermarket price cuts on some shopping basket essentials have stemmed the increase in grocery bills.

The annual rate of price growth on key products fell back slightly in July, according to the Daily Mail Cost of Living Index.

Even so, the increase is still running at 17.8 per cent.

The fall from 19.8 per cent in June is the first in four months and reflects reductions on a small number of products such as broccoli and sausages.

Shoppers will hope that the supermarket jousting in recent weeks will escalate into a full-blown price war.

However, the evidence of continuing global commodity price rises and recent research by the Organisation for Economic Co-operation and Development suggests this is only a temporary respite.

Consumers are being squeezed by increases in the cost of groceries, petrol, energy and mortgages.

A household which spent £100 a week on food last year now needs to find another £18 a week, or £936 a year.

The price of petrol and diesel has hit a new high this week, and motorists face an increase of 10p a litre over the summer.

The AA puts the average cost of diesel at 132.9p a litre, which is up almost 40 per cent a year, while the figure for unleaded is up 23 per cent to 119.52p a litre.

This means the annual average cost of driving a diesel car has surged by around £365.

The cost of heat and light is up by just over 14 per cent - £131 a year - taking it to £1,056. Industry analysts are warning of a rise of as much as 40 per cent over the next year. The cost of fixed-rate mortgages continues to rise despite recent cuts in the base rate by the Bank of England.

The annual repayment on a new two-year deal based on borrowing 75 per cent of a property's value is put at £12,300, which is up by £725 compared a year ago.

The supermarkets have been vying for the crown of cheapest store with a series of promotions, slashing the price of some lines to 50p or less.

Tesco, for example, has a 350g pack of broccoli florets which is down by 51 per cent on a year ago to 49p.

Asda has cut the price of Silver Spoon sugar from 98p to 85p, and among the reductions at Sainsbury 's are 19p off a ten-pack of Birds Eye Fish Fingers, bringing the price down to £1.50.

However, the index does reveal some big price rises.

For example, a thick sliced own-label loaf at Tesco is up by 50 per cent in a year to 72p.

Dairy products, too, are showing particularly large rises.

The Daily Mail Cost of Living Index was launched in April in partnership with MySupermarket.co.uk and uSwitch.com. It has spawned a number of inferior copies, which do not carry latest, accurate price information.

Director of MySupermarket, Johnny Stern, said: 'For the first time in four months the index shows a decrease in the price of food items year on year.

'We're still seeing phenomenal price rises in wheat and dairybased products, but there is no question that supermarkets are doing what they can to help consumers.'