Inflation slowed in July as energy bills dropped, easing pressure on consumers as pay finally starts to rise faster than prices.

Prices, as measured by the consumer prices index (CPI), rose by 6.8pc in the year to July, according to the Office for National Statistics (ONS).

This was down from 7.9pc in June and represents the lowest rate since February 2022, at the start of Russia’s war in Ukraine.

Economists had expected a fall in the headline rate to 6.7pc. The figure was in line with the Bank of England’s prediction of 6.8pc, although inflation remains well above its 2pc target.

The retail prices index (RPI), which is no longer an official statistic but is used to calculate increases in a range of consumer bills, increased by 9pc in the year to July.

Rail fares usually rise in January in line with July’s RPI.

However, the Department for Transport has already said regulated fares will not increase as much as the July figure in 2023. 

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