London, England, United Kingdom (4E) – Inflation in the UK fell by more than anticipated in July, reducing the urgency for the Bank of England to raise interest rates soon.
The annual rate of inflation declined to 1.6 percent in July from 1.9 percent in the prior month, according to the Office for National Statistics report released Tuesday. The fall was boosted by a larger decline in prices for footwear and clothes from the previous year.
The decline was bigger than forecast in a poll by The Wall Street Journal. Economists had expected the annual pace to fall to 1.8 percent in July.
The decline means the annual rate of inflation is below the Bank of England’s target of 2 percent.
Tuesday’s data showed that inflationary pressures in the economy remained modest. Factory gate prices were down 0.1 percent in July from a year ago, while cost of raw materials is lower by 7.3 percent on year.