The UK inflation rate fell to 2.1% in the 12 months to July as the economy continued to reopen from COVID-19 restrictions, lower than previously forecasted.
The measure of inflation is down from 2.4% in the 12 months to June, the highest level for nearly three years, and is now just above the Bank of England's 2% inflation target, the Office for National Statistics says.
Clothing and footwear, and a variety of recreational goods and services, made the largest downward contribution to the change in inflation rate between June and July 2021.
Price increases for second-hand cars partially offset the fall in inflation rates in July.
The data seems to dampen fears about soaring inflation rates, although some economists think inflation is still set to rise later this year as the Bank of England (BoE) expects.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that while inflation fell in July, "near-term upward momentum also faded".
He added:
"Our view remains that CPI inflation will peak a bit below 4% later this year and then fall back faster than the BoE expects in 2022, due to some mean-reversion in core goods and energy prices."
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