Good news about inflation has been in short supply for quite some time, but yesterday the Government and Bank of England will have been buoyed by the news that headline price increases fell by more than one percent in July.

While the data had been expected to show a significant improvement, the news was nonetheless gratefully received.

Headline inflation that had been at 7.9% in June, came in at 6.8%, while the core, which has the more volatile items like food and energy stripped out, was unchanged at 6.9%.

Despite inflation seeing a considerable improvement, it is still far too high for the Bank of England’s liking and a further hike in short term interest rates is expected to be agreed at the next meeting of the MPC which takes place on September 21st.

The fall in inflation brought the headline to its lowest level since February 2022 and was due to falls in energy prices. The wholesale price of gas has been falling continuously since it made a record high last August, so the fall in inflation had been expected.

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