Inflation fell to 2.4% in June, down from 2.8% in May – the third consecutive month the annual rate has fallen as retailers started summer sales earlier than usual due to the wet weather, according to figures from the Office for National Statistics.
The dip is the largest on record between these two months, since the CPI was launched in 1996.
Clothing and footwear were major contributors to the fall in inflation. Across the category overall prices dropped by 4.2% as retailers kickstarted summer sales earlier compared to last year. However a surge in football shirts on the back of Euro 2012 and UEFA Champions League tournaments helped redress the balance, pushing inflation upwards.
Food also caused downwards pressure as prices overall fell by 0.1% in June compared with a 0.9% rise a year ago. All food categories apart from fruit and vegetables pulled inflation down, with meat the biggest contributor, as retailers reported wet weather had hampered demand.
Non-alcoholic drinks had a small upward effect as prices recovered across tea bags and fruit drinks.
Conlumino managing director Neil Saunders said: “The unseasonal weather has meant many apparel retailers have been more promotionally driven to shift stock meanwhile, food retailers are engaged in a competitive battle to grow share through discounting which has helped keep a lid on inflationary growth.
“Looking ahead, we do expect further downward movement in inflation. However, depleted retail margins, commodity cost pressure and the interest rate environment are all guarding against major declines in prices.”
Travel also kept inflation down, as prices overall fell 0.5% as the price of fuel dropped.
Recreation and culture was the only other area pushing inflation upwards as the prices of digital cameras fell more slowly in June than a year ago.