Price rises slow down driven by clothes discounts

The UK inflation rate fell to 2% in the year to July as the final coronavirus restrictions were removed.

The Consumer Prices Index (CPI) measure of inflation dipped from 2.5% in the year to June, the highest level for nearly three years, the Office for National Statistics (ONS) said.

The rate fell to the Bank of England's 2% inflation target, after being higher for two months in a row.

The dip in inflation was driven by price falls in clothing and footwear.

That "largely offset" price rises in transport, the ONS said.

Liz Martins, UK economist at HSBC, told BBC Radio 4's Today programme that experts were expecting the annual inflation to decrease a little, but added the size of the fall was a "a bit of a surprise".

"Today's figure puts the brakes on those who argue that inflation is about to go out of control," she said.

Ms Martins said the reasons for the dip in inflation were "quite broad based", but added the main contributors were "good sales" in the clothing shops over the summer, computer games and food prices, which are down year-on-year.

However, Ms Martins said there was still expectations that inflation rates would rise later in the year.