Inflation falls to 2.8 per cent in July

Inflation fell to 2.8 per cent in July, down from 2.9 per cent in June, according to the latest figures from the Office for National Statistics (ONS).

The ONS said that reduced air travel costs and lower prices in the recreation and leisure and clothing and footwear sectors were responsible for the fall, which was offset by higher petrol and diesel prices.

The Consumer Prices Index 12-month measure of inflation compares the cost of goods and services to households each month, compared with the same month in the previous year. Growth in inflation was 2.8 per cent between July 2012 and July 2013, a 0.1 per cent fall compared with the June 12-month rate.

The chief economist at the British Chambers of Commerce, David Kern, said that any fall in inflation would ease the pressure on businesses and households. He added:

"Businesses need long-term reassurance when making decisions that affect their company. With this in mind, we hope that the MPC [the Bank of England's Monetary Policy Committee] rejects initiatives such as adding to QE [quantitative easing] that could add to inflationary pressures. The UK economy is now recovering at a moderate pace, and we would urge the government and MPC to do everything possible to sustain recent positive trends."