The average rise in prices slowed last month due to lower energy costs, but pressure remains on households, with good restaurant and hotel costs staying high.
Inflation as measured by the consumer prices index rose by 6.8% in the 12 months to July 2023, down from 7.9% in June.
On a monthly basis, inflation decreased by 0.4% in July 2023, compared with a rise of 0.6% in July 2022.
Falling gas and electricity prices provided the largest downward contributions to the inflation rate, with prices falling by 8.2% in the year to July.
However, the cost of eating out, alcohol, tobacco and flight prices has risen. Food and non-alcoholic beverage prices rose by 14.9% in the 12 months to July 2023, down from 17.4% in the year to June 2023.
Commenting on the figures, James Smith, research director at the Resolution Foundation, said:
"Inflation has fallen rapidly over the past six months, but the UK still has the highest rate in the G7 and the Bank faces a daunting task in further taming price pressures.
"Accelerating pay growth will make even the Prime Minister's promise to halve inflation hard to meet, let alone the Bank's mandate of reducing it to 2%."
Talk to us about your business.
