The rate of Consumer Prices Index inflation fell to 6.8 per cent in July, down from 7.9 per cent in June, the Office for National Statistics (ONS) said.
It is now at the lowest rate for 15 months, since February 2022, with the recent easing driven by falls in the price of gas and electricity.
The easing of inflation is slightly higher than some experts had expected, with analysts having predicted a reading of 6.7 per cent for the month.
ONS deputy director of prices Matthew Corder 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.
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“Although remaining high, food price inflation has also eased again, particularly for milk, bread and cereal.
“Core inflation was unchanged in July, with the falling cost of goods offset by higher service prices.”
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 two per cent target as soon as possible.”
Shadow chancellor Rachel Reeves said that despite the fall in CPI to 6.8 per cent in July, inflation in Britain "remains high and higher than many other major economies”.
She said: “After 13 years of economic chaos and incompetence under the Conservatives, working people are worse off – with higher energy bills and prices in the shops.
“Labour’s plan to build a strong economy will make working people better off by boosting growth, improving living standards and cutting household bills.”
GB News' Economics and Business Editor Liam Halligan said it was "good news" on headline inflation.
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UK inflation has eased again
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The Bank of England has increased the base rate 14 consecutive times now, to try to ease inflation.
The Bank Rate was increased by 0.25 percentage points to 5.25 per cent earlier this month.
Despite inflation easing again, Liam Halligan warned another rate rise could be on the cards next month.
He told GB News viewers: "I do think unfortunately for young families, for mortgage holders, people with personal debt, businesses indebted, I do think we will see another rate rise on September 21."
He added: "I don't think everybody wants to see interest rates not go up. A lot of our GB news listeners and viewers are savers and they will want higher interest rates. But a lot of young families, a lot of mortgage holders, a lot of businesses with debt - 75 per cent of business debt is on variable rate. They will want the Bank of England to pause its interest rate rises. We've had 14 so far."
