A dip in food prices saw high street inflation ease slightly in September, the British Retail Consortium said.
In its monthly shop price index the BRC also warned that retailers were finding it difficult to pass on higher costs to consumers.
BRC director general Kevin Hawkins said: "Prices have stabilised after rising sharply in August following the end of the traditional sales period.
"Food inflation is easing off slightly, and cost pressures are still not being passed onto the consumer."
Prices were up 1.11 per cent from the year before, the retail lobby group said.
This is the third month in a row that the annual inflation rate has shown an increase, but is lower than the 1.40 per cent rise in August.
This month's rise was also artificially boosted by last September's inflation rate of 0.54 per cent, the BRC said. On a month-on-month basis, the BRC said prices rose 0.11 per cent - the fourth time this year that the index has shown a month-on-month rise.
It said the price of non-food items rose 0.16 per cent on the month after a 0.14 per cent rise in August, while food prices rose by just 0.01 per cent from August, the lowest month-on-month rise this year.
Both retailers and manufacturers are having to absorb more costs as consumers start to hold back and competition intensifies in the run up to Christmas, said Mike Watkins, senior manager of retailer services at ACNielsen.
In September, the top-line sales growth at food retailers was lower than in August and recent inflationary increases in food are also now slowing.
For non-food retailers face shoppers tightening discretionary spend, he said.