British inflation eased more than expected in July after hitting a five-month high of 1.9% in June, official data showed today.
UK consumer prices rose 1.6% on the year in July, the Office for National Statistics said. Economists in a Reuters poll had expected inflation to fall to 1.8%.
Compared with the previous month, the consumer price index in July was down 0.3%, the ONS said.
Separate data from the ONS showed house prices in Britain 10.2% in June, adding to signs from other surveys that the rapid pace of house price growth is starting to moderate.
Growth in property prices continued to be led by London where they rose 19.3%.
Until December last year, annual inflation exceeded the Bank of England's 2% target every month since December 2009, eroding the spending power of households and making the fall in living standards a big political issue ahead of next year's election.
That has helped the Bank of England to hold off on raising interest rates despite Britain's surprisingly strong economic recovery.
The ONS said the biggest negative contribution to inflation in June was clothing and footwear.
An underlying measure of inflation, which strips out increases in energy, food, alcohol and tobacco, rose by 1.8% on the year in July. The ONS said consumer price inflation for the second quarter as a whole was 1.7%.
Data also released by the ONS today showed that factory gate prices fell by 0.1% in annual terms, slightly below economists' predictions for no change.