Inflation proved stubborn in July as economists warned that underlying pressures meant the UK was not yet at a turning point on price rises.

The consumer prices index (CPI) rose by 6.8pc in the year to July, according to the Office for National Statistics (ONS), as the lower energy price cap pulled down household bills.

While the drop was in line with the Bank of England’s prediction of 6.8pc, economists had expected a sharper fall to 6.7pc.

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

However, core inflation, which strips out volatile price movements in food and energy, remained at 6.9pc in July, against expectations for a slight fall to 6.8pc.

Services inflation, which is being watched closely by the Bank, also rose 7.4pc, up from 7.2pc in June. Both suggest policymakers will be forced to keep raising interest rates from their current level of 5.25pc to try to keep a lid on inflation.

Paula Bejarano, an economist at the National Institute of Economic and Social Research, said: “Despite the welcome fall in the headline rate, we have yet to see a turning point in the underlying rate of inflation, which remains stagnant at around 7pc.”

Food prices also continued to rise sharply, at 14.8pc in the year to July.  However, this is down from 17.3pc in June and comes as a price war heats up among supermarkets.