UK inflation rate slows again in July

UK inflation eased to 3.1% in July from 3.2% in June, the third month in a row that prices have risen more slowly.

The Governor of the Bank of England has admitted surprise at the recent high levels of inflation and has warned that it is difficult to predict how fast and far it will fall.

Mervyn King's comments come as the latest figures show a slight drop from 3.2% to 3.1% in July, still way above the Bank's 2% target.

Falling prices for petrol, clothing and furniture have helped ease inflation but the cost of food has seen its biggest monthly rise for two years.

Hugh Pym reports.