UK inflation falls sharply to 6.8% as cost of living pressures ease

Lower energy costs behind drop in annual rate in July, as wage increases finally overtake price rises

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The UK's annual inflation rate fell sharply to 6.8% in July, from 7.9% in June, as the drop in energy prices over the past year led to the smallest increase in the cost of living since February 2022.

Financial markets had been braced for a marked easing in upward price pressure last month, and the figure announced by the Office for National Statistics (ONS) was in line with their prediction.