Prima facie, increased competitive pressures would be expected to both dampen firm profit mark-up behaviour while also potentially altering developments in costs (such as the cost of capital and labour) which underlie price dynamics.
In contrast to relative price effects, which have a complex, because bipolar, ex-ante impact on inflation, these competitive effects would be expected to unambiguously exert a moderating influence on inflation as long as impediments to competition are not in place.