Inflation eased again last month as Brits were given some respite from relentless cost-of-living pressures.
The headline CPI measure was 6.8 per cent in July, down from the 7.9 per cent recorded in June and the lowest since February last year.
Chancellor Jeremy Hunt hailed the drop as evidence the government’s plan is working, while warning ‘we’re not at the finish line’.
However, worryingly core inflation – excluding more volatile energy, food, alcohol and tobacco – remained stuck at an annual 6.9 per cent. Falls in prices of goods were offset by rises in services.
The respected IFS think-tank said Rishi Sunak’s target of halving inflation by the end of the year now looked ‘in jeopardy’.
It comes after another record increase in wages placed further pressure on for the Bank of England to keep hiking interest rates.
The fall in overall CPI was largely down to a reduction in energy prices, after volatility sparked by the Russian invasion of Ukraine eased back.
From the start of July, the average price for each unit of electricity that someone uses was slashed to 30p per unit, while gas prices fell to 8p per unit, meaning the average annual energy bill for a household dropped to £2,074 from the capped rate of £2,500.
