CPI inflation unchanged while RPI rises to -1.4

Consumer Prices Index (CPI) annual inflation was 1.8 per cent in July, the same as June, which is below the Government's 2 per cent target.

Figures published by the Office for National Statistics also reveal that annual inflation as measured by the Retail Prices Index (RPI) - which includes housing costs such as mortgage interest payments and council tax - was -1.4 per cent, compared with -1.6 per cent in June.

The largest downward pressure affecting the change in the CPI annual rate came from food and non-alcoholic beverages. This was principally due to meat and vegetable prices falling this year but rising a year ago across a range of products. There was a small downward effect from bread and cereals, where prices rose by less than a year ago.

There was also a large downward pressure from restaurants and hotels where prices rose by less than a year ago. This downward effect came from restaurants and cafes, particularly relating to takeaway items, and accommodation services, where prices were little changed this year but rose a year ago.

The only large upward pressure affecting the change in the CPI annual rate came from recreation and culture. The effect came mainly from games, toys and hobbies and, to a lesser extent, from recording media, with prices of computer games and pre-recorded DVDs rising this year but falling a year ago. Partially offsetting these effects was a small downward contribution from photographic equipment where prices fell by more than a year ago.

The main factors affecting the CPI also affected the RPI. Additionally, there was an upward pressure from housing with the largest effect coming from house depreciation. Depreciation is excluded from the CPI.

RPIX inflation - the all items RPI excluding mortgage interest payments - was 1.2 per cent in July, up from 1.0 per cent in June.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in June, at 1.8 per cent, was above the provisional figure for the European Union as a whole of 0.6 per cent.