While CPI inflation reduced modestly by 0.1% from 3.2% in June, the Governor of the Bank of England was forced to once again write to the Chancellor to explain why targets had been missed.
Month to month, inflation fell 0.2% on June compared to no change a year ago, which are both normal for the time of year.
Falling transport costs were the main factor in the change to CPI annual inflation between June and July, mainly due to the falling price of second-hand cars. Petrol prices also fell by 0.7 pence per litre over the month having risen 1.1 pence per litre a year ago.
Further downward pressure on inflation came from a 4.9% drop in clothing and footwear prices; the largest drop seen over June and July since 2002.
However, food and drink prices rose 1% over the month, with the single largest upswing from vegetables.
RPI annual inflation was 4.8% in July, down from 5% in June, with the main factors affecting the CPI also affected this index.
RPIX inflation, which does not include mortgage interest payments, was also 4.8%, down from 5% in June.
