Figures released this morning show that the annual rate of inflation in Britain slowed to 1.4% in July, compared with 1.6% in June.

The Office for National Statistics said prices fell by 0.3% in the month, mainly because of heavy price discounts at furniture shops. Food prices also fell.

The annual rate is well below the Bank of England's 2% target, though analysts still expect it to raise interest rates further before the end of the year.

Separate figures showed that Britain's trade gap widened to from £4.92 billion in May to £4.97 billion in June, bringing the Q2 deficit to a record £10.8 billion.