The first signs of respite for consumers came yesterday as a slump in the price of crude oil held out the prospect of lower prices for fuel and food.

Supermarkets are preparing a new round of price cuts in coming weeks after the dramatic slide in crude oil to $86 (£50) a barrel, the lowest price for a year, and amid signs that food inflation has stalled.

Figures from the British Retail Consortium (BRC) showed that food inflation may have peaked with food price inflation down to 3.6 per cent in September from 3.8 per cent in August. It is too soon to celebrate but there may still be cause for festive cheer.

Stephen Robertson, the BRC’s director-general, said: “The man in the street and families will feel a little more confident as a result of the interest-rate reduction and lower commodity prices and this is particularly important in the run-up to Christmas.”

He gave warning, however, that there would not be a sharp turnaround in the fortunes of the high street, and said much depended on mortgage repayments being lowered.

“It is going to be a demanding time for the retail sector, but there have never been so many deals and promotions in stores. I know that business on promotions has gone up from 20 to 30 per cent of turnover and there may be more,” he said. Petrol companies are also ready to cut prices in response to the aggressive marketing by supermarkets, helping motorists and commercial transport companies alike.

Typical petrol prices across the country yesterday were 109.4p a litre for unleaded, 8 per cent lower than this year’s highest level of 119.9p in July, while average diesel was 120.8p a litre, 9 per cent down from the high of 133.3p. Fuel prices are expected to rise during November because of the increased demand in winter when oil is also needed for heating.

Industry experts are confident that any price rises before Christmas will be nothing like the peak oil price of $147 reached in July.

Edmund King, president of the AA motoring organisation, said: “There will be relief at the pumps throughout this month. But prices will creep up due to winter demand with analysts predicting increases to $110 a barrel. There are certain to be more price cuts for motorists because supermarkets are so desperate to get people into their aisles. Then the oil companies follow on.”

BP, Britain’s biggest fuel supplier with 1,146 outlets, has already cut fuel prices in the past few weeks by 3p a litre and more cuts are likely.

Ed Mayo, the chief executive of Consumer Focus, the newly revamped National Consumer Council, said: “Fuel suppliers here usually react quickly to changes in the price of oil. Increased transportation costs were in part to blame for higher food prices so we may see these trickle down in time for Christmas.”