Motor fuel prices provided the biggest downward contributor, falling 1.3% between June and July, its fifth month of declines.
India's consumer price inflation based on the consumer price index zoomed to 2.36 per cent in July 2017, up from 1.54 per cent in June, reversing a declining trend of the past three months.
Vegetable prices fell by (-) 3.57 per cent in July compared with (-) 16.53 per cent in June, prices of pulses fell (-) 24.75 per cent, against (-) 21.92 per cent in June.
While RPI inflation has risen, the consumer prices index (CPI) measure of inflation - which is more widely used - remained unchanged in July at 2.6 per cent. Last month's inflation announcement saw the level unexpectedly drop from 2.9% to 2.6% which surprised markets and caused a headache for Sterling as it makes a United Kingdom interest rate rise less likely in the near future. Producer output prices rose a modest 0.1% month-on-month (m/m), causing the year-on-year (y/y) increase to dip to 3.2% from 3.3% in June and 3.6% in May.
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However, July's Retail Prices Index (RPI) measure, which the government uses to calculate the rise in regulated rail fares, rose from 3.5% to 3.6%. Input prices for factories increased 6.5 percent on the year, compared with a 10 percent rate in June.
The U.K. inflation rate was unchanged in July as the effects of the pound's drop after the Brexit vote a year ago started to fade. This marks a sharp increase from the 0.90% WPI inflation reported in the month of June 2017.
The fall in food inflation has been brought about by disinflation in the prices of mainly pulses and vegetables, which is assessed to be a stabilising factor.
"It seems unlikely we will see an interest rate hike anytime soon, as ongoing concerns over the UK's Brexit negotiating position compounded by a slowing domestic economy weigh on both business and consumer confidence", said Jake Trask, FX research director at OFX.
On a year-on-year (YoY) basis, the WPI had risen by 0.63 per cent in July 2016.
While the BOE expects the squeeze on United Kingdom pockets to continue for some months, it has said that inflation is near its peak and this may be as bad as it gets.
Prices of other major group under the WPI - manufactured products - which comprise almost 64.23 per cent of the index, rose by 2.18 per cent.