The UK inflation rates for July have taken an unexpected dive, primarily driven by a significant drop in electricity and gas prices, the Office for National Statistics (ONS) has confirmed today.

The Consumer Prices Index, which includes owner occupiers’ housing costs (CPIH), has witnessed a substantial decrease in its annual inflation rate for housing, water, electricity, gas, and other fuels.

July saw this rate shrink to 5.4%, marking a significant decline from the peak of 11.8% in the early months of the year.

The Consumer Prices Index (CPI) has experienced a parallel decline – its annual inflation rate for the mentioned sectors dropped to 6.8% in July 2023, a considerable reduction from its alarming peak of 26.7% in January 2023.

This noteworthy fall in inflation can be attributed largely to the implementation of a new price cap Ofgem in July 2023, the ONS has said.