The largest downward contribution came from food prices, as supermarkets led price cuts across a range of products including bread and cereals, meat, fish, fruit and vegetables. In addition, price increases last July on beef and shop bought milk were not repeated this year.
Another large downward contribution came from furniture and furnishings, with average prices falling over the month by more than 10 per cent, a record for July, following record increases for June last month. Widespread sale prices were available on a range of items in July including kitchen, bedroom and lounge furniture.
Other large downward contributions came from:
Transport, with average petrol prices recorded across July falling by around 0.3p per litre, compared with an increase of nearly 2p last year;
Housing and household services, as energy bills continued to fall due to the phasing in of gas and electricity tariff reductions and some new cuts this month; and;
Recreation and culture, where July saw some price reductions for digital cameras and camcorders, personal computers, recording media and theatre admissions.
The only large upward effect on the CPI annual rate came from clothing and footwear, with the effect of summer sales being smaller this July than a year ago, particularly for women's outerwear.
RPI inflation fell to 3.8 per cent in July, down from 4.4 per cent in June and was influenced by similar factors to those that affected the CPI. RPIX inflation – the all items RPI excluding mortgage interest payments – was 2.7 per cent in July, down from 3.3 per cent in June.
As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is above the average for the European Union as a whole. The provisional inflation rate for the EU 27 in June was 2.1 per cent, compared with the UK rate of 2.4 per cent for the corresponding period.