Let's now turn to some reaction from the Liberal Democrats.

In response to inflation lowering to 7.9%, Lib Dem treasury spokesperson Sarah Olney says "this will bring cold comfort to countless families worried about their mortgage going up".

Olney says "people are sick and tired of being told to hold their nerve when it's this Conservative government that crashed the economy in the first place".

She adds: “The government must take action to bring down food prices, and help those worried about the roof over their head due to spiralling mortgages and rents.”

Hannah Miller
BBC Breakfast cost of living reporter

The inflation figure gives us an idea of how fast the cost of living is rising in the UK but here are a few things you might not know.

1. Inflation is falling - so prices are still going up, just not as quickly

Prices are still rising quite sharply compared to a year ago, just at a slower rate than they have been. Prices are still likely to keep going up over the next few months, but not at the rate that has caused such a shock to households and businesses across the country over the last year.

2. Your costs might be rising even faster

The Office for National Statistics (ONS) which calculates inflation, bases its numbers on a basket of goods that reflects what most people across the UK are buying.

So if you are buying a lot of unusual or niche items, or you have atypical tastes, you might find the cost of your own bag of shopping is going up more quickly - or more slowly - than the headlines suggest.

3. Will prices ever fall?

While this might be difficult to believe right now, falling prices aren't always a good thing - here's why. If people expect that prices are likely to fall, they delay spending with the aim of getting a cheaper deal later on.

That means businesses have less money coming in, so they try to find ways to cut costs - most likely by cutting wages or laying off staff.

So prices falling can mean people lose their jobs, which in turn makes prices fall further. This is called "deflation", a different kind of economic crisis that brings its own set of problems.

Chris Mason
Political editor

You can feel the relief in government this morning at this new inflation number. Incidentally, the chancellor, like everyone else, only receives the figure at the same time as the rest of us.

Let’s be clear: ministers know millions are really squeezed by rising prices. But they also point out inflation "stands at its lowest level since last March".

After inflation looked like it was stuck - and stuck high - this latest number is a chunky fall.

Politically this matters because the squeeze in millions of family budgets might not be as bleak as it could have been. But also because the prime minister has promised to halve inflation this year - and that promise was beginning to look shaky.

Labour say inflation remains higher in the UK than "our international peers". And the Liberal Democrats say "this will bring cold comfort to countless families worried about their mortgage going up".

It is worth remembering what today’s figure actually is: the average rise in prices across the economy over the last 12 months.

The inflation rate we each individually feel will be different - depending on where we are, and what we spend our money on among other things.

Just to recap we've had a better-than-expected figure for inflation in June at 7.9% from 8.7% in April and May.

The Office for National Statistics, which releases this number, says the slow down principally reflected price changes in the transport division, particularly for motor fuels.

The ONS says: "There were also notable downward effects from food and non-alcoholic beverages, furniture and household goods, and restaurants and hotels."

Grant Shapps is on BBC Breakfast with his take now.

The energy secretary says that it's "good news" that fuel prices are coming down with the measures they took and adds "it's important that we just carry on following the plan, reducing inflation is one of the PM's top priorities".

He explains how inflation rocketed, saying: "Putin invades Ukraine, and pushes up energy prices and that pushes up inflation which pushes up mortgage rates so the whole thing is connected together. It's good to see that it's coming down, good to see energy prices are coming down."

Shapps says that ultimately, the UK will get some of the lowest energy prices in Europe.

When asked about why the UK has higher inflation than many EU countries and the US, Shapps says that the UK has very low unemployment and that gives them a tight labour market. He also says the US doesn't have the energy prices problem derived from Russia's invasion of Ukraine, and adds, "we have lower inflation than nine other EU states".

"We are moving in the right direction," he says.

Inflation heading in the right directionpublished at 07:45 British Summer Time 19 July 2023

07:45 BST 19 July 2023

Faisal Islam
Economics editor

Finally, most measures of inflation are heading in the right direction. The headline rate was, thankfully, lower than expected in June at 7.9%, and could fall below 7% in the next set of figures, as falls in household energy bills impact the numbers.

Today’s figures were driven by falls in petrol prices. In turn that was driven by a fall in the price of crude oil. Producer Price Inflation input costs, a measure of raw materials prices, actually turned negative because of the crude oil falls.

Underlying measures of “core inflation” dipped too. However, food price inflation, while down a bit, remained stubbornly high at a 17.3% annual rise.

Overall inflation remains the highest in the G7 advanced countries and is falling more slowly. Questions remain about the pass through of rapid raw materials price cuts to consumers here, especially in relation to profit margins. While this set of figures avoided a series of nasty surprises, the Bank of England is still likely to raise rates next month. It might opt for a smaller rise of 0.25%, on these numbers.

Labour's shadow chancellor Rachel Reeves says that prices are still rising sharply and compared to the US and European countries, the "situation in the UK is quite unique now".

Speaking to BBC Breakfast, Reeves says that food prices are increasing by 17% and that's the most important part for households. She adds that "the prices should be stabilised".

And she gives three things to focus on to bring down inflation:

"One, we should secure our own energy supplies, invest in nuclear and renewable energy.

"Second is the Brexit deal, with extra checks and bureaucracy food prices are higher than ever. We need to improve that deal to improve the flow of goods and services.

"Last, we need to help people back into the labour market - tens of thousands of people who were working before Covid are not working now."

Reeves says that the government also needs to help people struggling with the increasing prices.

The inflation figure we've just had - 7.9% - shows the rise in average cost of goods and services in the UK compared with 12 months before.

The fact it has come down shows that price rises are slowing – it doesn’t mean things have dropped in price, just rising more slowly.

In real terms it means if you bought goods and services 12 months ago for £100 you would have paid £107.90 in June.

You can try our calculator to see how increasing prices affects you here.

UK finding high inflation hard to shake offpublished at 07:30 British Summer Time 19 July 2023

07:30 BST 19 July 2023

Dharshini David
Economics Correspondent

Lower petrol prices and an easing of the increase in food bills lay behind lower inflation in the latest month.

But with a typical basket of goods and services still costing almost 8% more than a year ago, the UK is finding it harder to shake off this bout of high inflation than the US or the EU - or than policymakers would like.

As the chancellor admits “high prices are still a huge worry for families and businesses”.

Yet there are those with spare cash to pay higher prices for non-essentials: take out the likes of food and energy and so-called core inflation remains close to the 30-year high it reached in May as worker shortages keep labour costs high and firms are able to raise prices.

It’s that demand which the Bank of England is targeting, and so analysts expect more rate rises. But those take time to hit their mark - go too far and some are warning a more painful slowdown might result.

Chancellor Jeremy Hunt has just released a statement responding to the latest inflation figures.

He says: “Inflation is falling and stands at its lowest level since last March; but we aren't complacent and know that high prices are still a huge worry for families and businesses.

"The best and only way we can ease this pressure and get our economy growing again is by sticking to the plan to halve inflation this year."

We'll bring you more reaction as political leaders and analysts pick through the figures.

Image source, PA

Grant Fitzner, chief economist at the Office for National Statistics, is on BBC Radio 4's Today programme, and says drops in motor fuels and food prices drove inflation rate down.

He says inflation is falling, but "we still look like we may have the highest inflation in the group of seven countries, so still some way to go".

Fitzner says lower energy prices, and a drop in petrol and diesel prices, are encouraging and positive factors in the general trend for falling prices.

Although inflation dropped more than expected in June it’s still high.

In January, when the UK's inflation rate was above 10%, Prime Minister Rishi Sunak promised to halve it by the end of the year.

Many people expected inflation to fall quickly anyway.

However, inflation is stubbornly high in the UK and remained at 7.9% in June.

Analysts are divided about whether the government's goal will be achieved, external.

The rate of price rises in the UK has slowed more than expected in the 12 months to June.

Forecasters had predicted a fall from 8.7% to 8.2% so that's a bigger step in the right direction.

Falling fuel prices contributed to the drop, while food prices rose less quickly than in June last year.

Inflation in the UK dropped to 7.9% in the year to June from 8.7% in May, according to the Office for National Statistics.

We’re expecting the ONS inflation rate figures to be released in the next few minutes.

We’ll bring you the CPI number as soon as we have it, and reaction and analysis to the annoucement.

Stay with us.

Forecasters are predicting a small drop from 8.7% to 8.2%. But last month they had expected a marginal fall and the rate stayed the same.

Even if we do see the number go down, it's still a long way off the Bank of England's target of 2%.

Kath Paddison
Digital producer, Wake Up to Money

The founder of Nim's Fruit Crisps in Kent says she’s concerned that inflation remains high and what it could mean for her business.

Nimisha Raja, 59, set up the healthy snack food business in 2016 and says, “times are tough” and she is “worried but optimistic” about the future.

But she told BBC 5 Live’s Wake Up To Money: “As a business owner you have to be pragmatic, you have no choice but to take things in your stride and be forward thinking”.

The cost of more than 700 everyday items is gathered by the Office for National Statistics (ONS) to come up with a monthly inflation figure.

The so-called inflation basket, external is constantly updated, recently alcopops were removed and frozen berries were added.

Each month's inflation figure shows how much these prices have risen since the same date last year.

You can calculate inflation in various ways, but the main measure is the Consumer Prices Index (CPI).

The latest figure for CPI was 8.7% in the year to May, down from 10.4% in February and 11.1% in October.

UK wages have risen at a record annual pace fuelling fears that inflation will stay high for longer.

Regular pay grew by 7.3% in the March to May period from a year earlier, official figures showed,, external equalling the highest growth rate last month.

While pay is growing at record rates, it is still not increasing fast enough to keep up with rising prices in the shops. Regular pay fell by 0.8% after the effect of inflation was taken into account.

The concern is that strong wage growth will increase costs faced by companies and force them to push up the prices of their goods even higher.

This would keep inflation higher for longer and likely mean more interest rate rises as the Bank of England tries to bring it down.

• Read more: Record pay rises fuel fresh inflation fears

Elaine Doran
Cost of living producer

Alison Lawson from Scorton in Lancashire is a support worker who tells me the price of “everything is just going up and up”.

“Shopping, bills, mortgage - that’s a big one,” she adds.

“I work full time but I can pick up overtime at work, a bit extra to help with cost of living at the moment.

“Overtime used to be a luxury but it’s not now. It’s something I feel I have to do especially at the moment.

“You don’t always get them because there’s other people in the same predicament as me but I do get some. Just to keep up with the cost of everything.”

Lawson says she’s also been cutting back on spending. “I don’t go out socially anymore. My husband does but I don’t. Meals out – that doesn’t happen often at all.”