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The UK’s inflation rate has fallen to its lowest level since spring 2022.
The consumer prices index rose by 6.8% in the year to July, the Office for National Statistics said, down from 7.9% in June, meeting City economist expectations.
That takes CPI inflation further from the peak of 11.1% set last October.
But it still leaves inflation well over the Bank of England’s target of 2%.
Falling gas and electricity prices provided the largest downward contributions to UK inflation in July.
That is because the UK’s energy price cap was lowered at the start of July, to £2,074 a year for a typical household, below the government’s energy price guarantee of £2,500 a year.
The ONS said: "Prices of gas fell by 25.2% between June and July this year but rose by 0.1% between the same two months a year ago.
"Prices of electricity fell by 8.6% between June and July this year but rose by 0.4% between the same two months a year ago."
Food inflation slowed last month but prices are still sharply higher than a year ago.
Food and non-alcoholic beverage prices rose by 0.1% between June and July 2023, compared with a rise of 2.3% between the same two months a year ago.
That pulled the annual rate of inflation for food and non-alcoholic beverages to 14.8% in July, down from 17.3% in the year to June.
The easing in the annual rate was widespread, with inflation falling in 10 of the 11 areas of food and drink products, the ONS said.
Three of the 10 classes also experienced a fall in monthly price between June and July 2023, including milk, cheese and eggs – reflecting recent milk price cuts by supermarkets.
The chancellor, Jeremy Hunt, said the government’s "decisive action" had pulled down inflation: “The decisive action we’ve taken to tackle inflation is working, and the rate now stands at its lowest level since February last year.
“But while price rises are slowing, we’re not at the finish line.
“We must stick to our plan to halve inflation this year and get it back to the 2% target as soon as possible.”
However, the shadow chancellor, Rachel Reeves, said that inflation was still high, and also “higher than many other major economies”.
The agenda
• 9.30am BST: UK house prices and rents data
• 10am BST: eurozone GDP report for Q2 2023
• 11am BST: Ireland’s residential property prices data
• 1.30pm BST: US housing starts data
• 7pm BST: US Federal Reserve releases minutes of its last meeting
We’ll be tracking all the main events throughout the day ... |
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