The price of luxury goods and services in London has fallen by nearly 4%, the first fall in seven years, marking the end of a period of steep inflation of the luxury goods sector.

Prices of a basket of 50 luxury goods decreased 3.7% in the 12 months to April 2009 according to The Stonehage Group, a wealth manager which tracks the prices of high-end goods with its Affluent Luxury Living Index.