By Marcus Leach
Data released by the Office for National Statistics has shown that the rate of inflation, as measured by the Consumer Prices Index, fell to 2.4% in June, from 2.8% in May.
The official figures, released today (Tuesday), also revealed that the Retail Prices Index, which includes housing costs, fell to 2.8% from 3.1%.
The rate of inflation, which measures how quickly prices are rising, has been falling due to declines in food and fuel prices, and has now seen prices rising at their slowest rate since the end of 2009.
"Inflation continues to come down but unfortunately it's not coming down as fast as the roof on the UK economy," Jason Conibear, market analyst at forex specialists, Cambridge Mercantile, said.
"Low inflation is by no means a panacea. There are numerous fundamental threats to the UK economy, not least a Europe that's all but bust, zero confidence among consumers and business, and rapidly deteriorating public finances.
"Just because the cost of living is falling does not mean people will start living.
"The UK consumer — like the UK economy — is still top-heavy with debt and until a significant deleveraging has occurred, people are going to remain cautious.
"It's the UK's businesses that will pay the price of this new conservatism.
"This week's IMF downgrade has put this latest drop in inflation into the context in which it should be viewed.
"It is a rare piece of good news in an otherwise dire economic roll-call."
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