Inflation fell below the Bank of England’s two per cent target for the first time in almost two years in June.
The Consumer Prices Index (CPI) slid from 2.2 per cent to 1.8 per cent last month, the Office for National Statistics (ONS) said – the lowest since September, 2007.
Falling food prices in June – particularly for meat, milk and fruit – were the main factor behind the fall, compared with a year earlier when food costs were rising sharply.
CPI was also dragged down by a lower increase in furniture prices than was seen last year.
This means Bank Governor Mervyn King is likely to have to write a first letter to the Chancellor to explain why CPI is undershooting the two per cent target.