Inflation slows down amid energy price drop, new figures confirm

There is a glimmer of hope in the cost of living crisis following the announcement of new inflation figures. The Office for National Statistics (ONS) says inflation has fallen from 7.9% in June to 6.8% in July, in new figures released this morning (August 16).

It comes amid a drop in gas and electricity prices, with the energy price cap being lowered last month. But while price increases have slowed down, costs are still rising, with the inflation figure still well above the Bank of England's 2% inflation target.

Matthew Corder, ONS deputy director of prices, said: “Inflation slowed markedly for the second consecutive month, driven by falls in the price of gas and electricity as the reduction in the energy price cap came into effect. Although remaining high, food price inflation has also eased again, particularly for milk, bread and cereal.

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“Core inflation was unchanged in July, with the falling cost of goods offset by higher service prices.” The announcement comes amid an increase in wages confirmed yesterday at 7.8% excluding bonuses - although this still represented a fall of 0.6% against inflation.

The Bank is expected to increase interests again next month as it continues to grapple with inflation. Chancellor of the Exchequer Jeremy Hunt said: “The decisive action we’ve taken to tackle inflation is working, and the rate now stands at its lowest level since February last year.

“But while price rises are slowing, we’re not at the finish line. We must stick to our plan to halve inflation this year and get it back to the 2% target as soon as possible.”

But shadow chancellor Rachel Reeves insists that inflation in Britain