Inflation falls back to 1.6%

THE headline rate of inflation eased back to 1.6% in July according to the Office for National Statistics (ONS).

The decrease in the Consumer Prices Index (CPI), from 1.9% in June, was largely down to the falling cost of clothing.

Downward pressure also came from food, financial services and alcoholic drinks.

The ONS said the most significant price rises came from transport.

The Retail Prices Index (RPI), which includes housing costs, grew by 2.5%, down from 2.6%.