UK inflation rate falls to 2.8%

The Consumer Prices Index (CPI) rate of inflation fell by 0.1% to 2.8% in the year to July 2013, down from a 14-month high of 2.9% in June, according to the Office for National Statistics.

The largest contributions to the fall in the rate came from air fares, plus price movements (in some cases the result of seasonal sales) in the recreation & culture, and clothing & footwear sectors. A rise in petrol and diesel prices partially offset the fall.

The Retail Price Index (RPI) rate of inflation, which is typically higher than CPI, includes certain housing costs and is often used to calculate pensions; also fell, by 0.2% to 3.1% from 3.3% in June.

These latest numbers continue the trend of broadly steady inflation seen since spring 2012.

However, inflation (CPI) has not reached the Bank of England's 2% target since December 2009.

The fall will come as a relief to the government and Bank of England. The June CPI figure of 2.9% came close to the 3% threshold where the Bank of England governor, Mark Carney, would be required to write a letter of explanation to the Chancellor, George Osborne.