Official measures of inflation published yesterday showed prices stood still between June and July.
Year on year, the consumer prices index eased to 2.4 per cent from 2.5, still well above the Bank of England's two per cent target.
The long-running retail prices index, basis for state pensions and other welfare benefits and a benchmark by pay negotiators, stayed unchanged at 3.3 per cent. Not counting mortgage interest, there was no change, with a 3.1 per cent increase over 12 months.
But this apparent stability was due to lower air fares, a smaller rise in petrol than July last year and sharper price cuts for clothes and shoes in July sales.
Numbers from National Statistics show sharp contrasts for the Bank of England's interest-setting Monetary Policy Committee.
The cost of services, measured by the RPI, has risen by 5.1 per cent on 12 months, more than any month since April,1993 - while goods cost only 1.5 per cent more than last year, despite a 2.9 per cent increase in food prices.
Birmingham Chamber of Commerce and Industry said the slight fall in headline inflation should be enough to persuade the Bank not to raise its official rate again next month.
"Business tentatively welcomes the news that inflation has fallen slightly and will hope this has dampened calls for a further rate rise in September," said James Cooper, the Chamber's policy adviser.
"We recognise that inflation remains above the Govern-ment's two per cent target and share the concerns the MPC has about the damaging effect that high prices can have upon the economy.
"We also understand the current volatile nature of high energy prices and the fact that the current highs that we are seeing are yet to filter through into official inflation figures.
"However, as the British Chambers of Commerce recognised, spare capacity remains in the economy and there appears to be little evidence that high oil and gas prices have translated into higher wage demands.
"Business believes that the UK economy is fragile and that any fresh rate rises could have serious implications. As such, we call upon the committee to wait and see what effect its August rise has had on controlling inflation before sanctioning further hikes."
But many City economists have pencilled in another quarter-point rise by November to take the official rate to five per cent.
The Bank's governor Mervyn King said there was a 50-50 chance that he would have to write a letter to Chancellor Gordon Brown by the end of the year explaining why inflation has risen above three per cent.
One factor is that higher university tuition fees in October could add a quarter per cent to the official cost of living.
The full impact of household energy bills may also not have worked through to the statistics yet.
Other analysts were more sanguine yesterday.
"We think that a combination of tamer than expected inflation data, plus growing signs of an economic slowdown both globally and domestically, will put paid to further tightening," said a Standard Chartered economist Gavin Redknap.
The biggest downward contribution last month came from furniture and household equipment prices, where special offers trimmed prices by 2.1 per cent and lowered the annual rate by more than in any month since December, 2000.
Food and non-alcoholic beverage costs rose at their steepest since February, 2002, after demand in the heatwave.
The cost of petrol held inflation down because an increase of 1.9p a litre last month was 0.9p less than last in last July.