Inflation has remained at the same level for the second month running.

Figures published by the Office for National Statistics (ONS) have revealed that the Consumer Prices Index (CPI) annual inflation was 1.8% in July, unchanged from the month before.

The annualised percentage change in a general price index (such as the CPI) is the chief measure of price inflation – the rise in the general level of prices of goods and services in an economy over a period of time.

The ONS data also showed that annual inflation as measured by the wider Retail Prices Index (RPI) – which includes housing costs such as mortgage interest payments and council tax – was -1.4%, compared with -1.6% in June.

As the measure of inflation used to calculate many rail fares, July’s number is significant because a formula of RPI plus 1% is used the following January to set regulated train fares such as season tickets and some longer distance, off peak tickets – in this case they will drop by 0.4%. This will be much welcomed by commuters after fares jumped by 5% after inflation surged last summer, eventually peaking at 5.2% in September.

Computer games, toys, DVDs and furniture prices all had an upward effect on the CPI, which analysts had expected to fall further below the Bank of England’s 2% target to 1.5%.

The largest downward pressure affecting the change in the CPI annual rate came from food and non-alcoholic beverages. This was principally due to meat and vegetable prices falling this year but rising a year ago across a range of products. There was a small downward effect from bread and cereals, where prices rose by less than a year ago.

There was also a large downward pressure from restaurants and hotels, particularly relating to takeaway items, and accommodation services, where prices were little changed this year but rose a year ago.

Although inflation has remained “stickier” than many analysts forecast this year, falling more slowly than expected, economists and the Bank of England still expect it to dip below 1% this year; likewise Governor Mervyn King said he expected to have to write a letter to the Chancellor later this year explaining why CPI was more than one percentage point below target.

For more information on these figures, visit: http://www.statistics.gov.uk/pdfdir/cpi0809.pdf