Inflation fell sharply in July, driven by lower gas and electricity prices although the core figure refused to budge.
Figures from the Office for National Statistics (ONS) showed the consumer prices index (CPI) fell to 6.8% in the 12 months to July from 7.9% in June, in line with forecasts from the Bank of England and City economists.
Annual inflation slowed again in July 2023.
▪️ Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 6.4% in the 12 months to July 2023, down from 7.3% in June
▪️ Consumer Prices Index (CPI) rose by 6.8%, down from 7.9% in June
— Office for National Statistics (ONS) (@ONS) August 16, 2023
But core CPI (excluding energy, food, alcohol and tobacco) rose by 6.9% in the 12 months to July, unchanged from June, and ahead of forecasts of 6.8%.
There was also an unwelcome jump in services inflation which rose from from 7.2% to 7.4%.
The ONS said falling gas and electricity prices provided the largest downward contributions to the monthly change in CPI while food prices also grew at a slower pace.
Hotels and air travel provided the largest offsetting upward contributions.
The figures come a day after data from the ONS showed strong wage growth although a separate survey showed UK grocery price inflation fell sharply as the cost of staples such as milk and sunflower oil eased.