Inflation drops by more than a percentage point

This figure was down from its recent peak of 11.1% in October 2022, its highest annual inflation rate since 1981 – with the rate now currently at its lowest since February 2022. There was also an easing of monthly CPI, falling by 0.4% in July 2023 – this is compared to a rise of 0.6% during the same month last year. 

Turning to Consumer Prices Index including owner occupiers’ housing costs (CPIH), this decreased by just under one percent going from 7.3% in the 12 months to June to 6.4% in July and is down from its recent peak of 9.6% in October 2022 – which was its highest rate in more than 40 years. This came because of prices falling by 0.3% on the month compared with a rise of 0.6% a year earlier.  

The easing of inflation principally reflects price changes in the housing and household services division – particularly gas and electricity, while there were also price drops from the food and non-alcoholic beverages sector – particularly from milk, bread and cereals. In contrast, hotels and passenger transport by air provided the largest offsetting upward contributions to the change in the annual rate.  

Money Advice Trust’s chief executive Joanna Elson said: “This fall in the rate of inflation is an early sign that the relentless pressure of rising prices is beginning to ease.   

“Our hope is that this is the case, but the reality for millions of people is that they are far from out of the woods. Prices are still high, budgets are still stretched and millions are struggling to cope.

“Ensuring there are safe routes out of debt for those most severely affected by the cost of living is now vital.  I would urge the Government to remove barriers preventing people accessing debt solutions, including reducing or waiving fees for debt relief orders and bankruptcy.”