Price inflation, as measured by the Consumer Prices Index (CPI), has fallen to 2.8% for the twelve months to July 2013.
CPI inflation fell in July from 2.9% the previous month.
The rate of the Retail Prices Index (RPI) measure of inflation also fell in the year to July, from 3.3% to 3.1%.
Unlike the CPI measure of price inflation, RPI includes mortgage interest payments and is often considered to be a better reflection of rising living costs.
Inflation fell in July as a result of lower air fares, discounting by clothing retailers and a reduction in the cost of leisure and cultural goods, according to the Office for National Statistics.
These new inflation figures mean that regulated rail fares will rise by an average of 4.1% next year, which is disappointing news for many commuters.
This above inflation rise in the cost of rail travel, including season tickets, will be introduced in January 2014.
Regulated rail fares have risen by 40% since 2008, according to the TUC.
At 2.8%, CPI remains stubbornly higher than the government target of 2%, although this slight fall is likely to keep the policy makers happy.
Last week we saw new Bank of England governor Mark Carney pledge to keep interest rates low until unemployment falls to below 7%.
This means interest rates are likely to stay at the historic low of 0.5% until 2016 or 2017, assuming job forecasts are correct.
