More accurately, the law (which is about the same as the EU law and large parts of EU consumer law were actually modelled on our consumer law) has to have clearly defined edges. IIRC it stipulates that the "real" price advertised during a sale must have been the price for a minimum of X months (not sure what exactly, I think it's six).

That's why we're currently seeing toothpaste for £7 - so they can do the price drop promo in 6 or so month's time without breaking advertising law while at the same time raising the baseline price in our psyches.