Inflation: Shock fall in cost of living

12th July 2011

Falling prices for toys, games and hobbies helped to reduce inflation during the month according to the BBC News website.

The Retail Prices Index (RPI) measure of inflation – which includes mortgage interest payments – also fell, from 5.2% to 5%, according to the Office for National Statistics.

Clothing prices fell 1.9% compared with the previous month, led by falling prices for women's outerwear and footwear, as summer sales began early.

The price data echoes poor retail sales revealed earlier on Tuesday by the British Retail Consortium.

Food costs continued to rise up 0.9% in the month, with notable increases in the cost of bread, cereals, meat, milk, cheese and eggs.

Despite the fall in June's inflation rate, the figures are above the Bank of England's 2% target.

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For the latest comment on the UK economy read Shaun Richards' blog here.

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