Nine essentials are now cheaper after the Consumer Price Index (CPI) rate fell from 7.9 percent to 6.8 percent in July, the lowest level seen in 15 months.
The CPIH, which includes owner occupiers’ housing costs and council tax, also reflected a slowdown in pace. In July, it rose by 6.4 percent down from 7.3 percent in June.
While the overall inflation rate may have slowed last month, prices are still rising at a pace of 6.8 percent, which means products still cost more than they did last year. However, certain goods and services have become cheaper since last month according to the Office of National Statistics (ONS), and these include electricity, gas, milk, bread, cheese, eggs, and petrol and diesel.
Milk, cheese and eggs
Milk, cheese and eggs provided a negative contribution of 0.04 percentage points to the monthly change in the CPIH annual rate.
The annual rate eased to 18.7 percent from 22.8 percent in June, while its monthly rate saw a fall of 0.4 percent.
According to ONS, milk products drove the largest negative contribution, with the price of whole milk falling 5.8 percent on the month and the price of low-fat milk falling 3.2 percent on the month.
This resulted in both items together providing a negative contribution of 0.03 percentage points to the monthly change in the CPIH annual rate.
Bread prices
The second-largest downward contribution came from bread and cereals, where the rate of annual price rises eased to 14.4 percent from 16.7 percent in June.
Within this category, bread, crumpets, pizzas and breakfast cereals made the largest negative contributions.
Electricity and gas prices
At the start of July, the average price for each unit of electricity reduced to 30p per unit while gas prices were slashed to 8p per unit.
This saw the annual energy bill for an average household drop to £2,074 from the Government’s Energy Price Guarantee rate of £2,500.
Further price drops in this area are anticipated later in the year, with analysts at Cornwall Insight predicting Ofgem to lower the energy cap even more to £1,860 a year in October.
Gas prices dropped by more than 25 percent in July against the previous month due to the cap change, while overall, electricity prices saw an 8.6 percent drop.
Petrol and diesel prices
Prices in the transport sector have fallen by 2.1 percent in the year to July, following a fall of 1.7 percent in June 2023.
The largest downward contribution came from motor fuels, which saw prices fall by 24.9 percent in the year to July 2023, compared with a fall of 22.7 percent in June.
Average petrol and diesel prices stood at 143.2 and 145.2 pence per litre respectively in July 2023, compared with 189.5 and 197.9 pence per litre in July 2022.
Petrol prices rose by 0.2 pence per litre between June and July 2023, compared with a rise of 5.5 pence per litre between the same two months a year ago.
However, diesel prices fell by 0.5 pence per litre this year, compared with a rise of 5.5 pence per litre a year ago.
