Lower gas and electricity costs drove a sharp drop in headline UK inflation in July but underlying price pressures failed to fall as expected, maintaining pressure on the Bank of England to keep interest rates high.
Consumer prices were 6.8 per cent higher in July than a year earlier, falling from an annual increase of 7.9 per cent in June, according to data published on Wednesday by the Office for National Statistics. This drop resulted in the lowest inflation rate since February last year.
The headline figure met economists’ expectations and will come as modest relief after wage data on Tuesday was surprisingly strong. But the details suggested Britain had not made progress in solving its inflation problem.
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