The UK's annual inflation rate fell to 6.8% in July, down from 7.9% in June,
according to the latest data from the Office of National Statistics (ONS).
It is the smallest increase in the cost of living since February 2022.
A fall in gas and electricity, as well as a slowing down in the increase of food
prices, are the major drivers behind the inflation rate decrease, according to
the ONS.
However, core inflation, which strips out volatile items such as fuel and food
remained unchanged at 6.9% in July while service sector inflation rose from 7.2%
to 7.4%.
Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:
'While a drop in inflation provides some comfort, the figures show less of a
drop in inflation than hoped for and will renew fears of a wage-price
spiral, and of yet more base rate hikes in future.
'The worry now is that rising wages ignite a fresh wave of inflation in
September, which will threaten the momentum from June's GDP growth.
'The cost of doing business crisis still has a grip on the small business
community, as prices for many key inputs, from energy to components and raw
materials, remain far above where they were a year ago.
'Any reduction in inflation is good news, but the huge toll that spiralling
prices have inflicted is still being keenly felt by small firms.'
Internet link: ONS website FSB website