The latest price inflation figures from the Office for National Statistics show inflation fell to 2.7% of the year to August 2013.
Price inflation as measured by the Consumer Prices Index (CPI) fell from 2.8% the previous month, resulting in figures that had been widely expected by economists.
This fall in price inflation was the result of lower air fares, petrol and diesel, and clothing prices.
Inflation as measured by the Retail Prices Index (RPI) was up in August, to 3.3% from 3.1% the previous month.
Unlike CPI, RPI includes housing costs such as mortgage interest payments.
At 2.7%, CPI inflation remains stubbornly higher than the government target of 2%. It also continues to exceed wage inflation, with average wages rising by only 1% during the same period.
It is important to factor inflation into long-term Financial Plans, particularly for retirement planning where price inflation tends to be higher for older people based on the typical goods and services they consume.
