Inflation Eases As Clothing Costs Fall
The falling costs of air fares and clothing have contributed to a slight easing in the headline rate of inflation.
The CPI measure stood at an annual rate of 2.8% in July, according to the Office for National Statistics (ONS), down from 2.9% the previous month.
The ONS said that discounting by fashion retailers and the lower air fares offset higher prices at the fuel pumps.
Clothing and footwear costs dropped by 3.2% from June as summer sales kicked in - with T-shirts and women's blouses among the bargains - while the price of a long haul air ticket fell.
But the lower rate of inflation will do little to ease the squeeze on households, with the rise in the cost of goods and services continuing to outpace wage growth, which increased by just 1.7% in the year to May.
The wider inflation figures also confirmed that commuters face a 4.1% surge in regulated rail fares next year.
The RPI measure, which dipped to 3.1% in July from 3.3% in June, means passengers face the sharp rise in ticket prices from January because regulated fares are pegged to the index in July - plus 1% - under the Treasury's current formula.
The Bank of England recently forecast that CPI would not rise above 3% this year.
Its Inflation Report was somewhat overshadowed by confirmation that the new governor, Mark Carney, was launching 'forward guidance' to give the public and investors some sense of certainty over the future direction of monetary policy.
The bank, which targets a CPI level of 2%, said it would be keeping the base rate of interest at its record low until the unemployment rate fell below 7% - not expected for three years.
Pressures on inflation have included fuel costs and factory gate data released on Tuesday suggested there would be no let up.
Crude oil costs for manufacturers rose at their fastest rate for a year in July.