UK inflation falls sharply to 2.4pc Azad Zangana, European Economist at Schroders said "Although the fall in the price of petrol and diesel made a significant contribution, clothing and footwear made the largest contribution overall. Indeed, the fall clothing and footwear was twice as large as the next largest fall in month on month inflation since the CPI was launched in 1996. Howard Archer, chief UK and European economist at IHS Global Insight, said: "Apart from their direct impact on the inflation rate, lower petrol prices also reduce the cost of transporting goods around so that should also have helped to limit inflation. It is also likely that annual food price inflation fell in June. Petrol prices should have fallen overall during June after oil prices retreated further from their March peak levels, with Brent crude averaging around US$95 a barrel in June, compared to US$110.2 a barrel in May. The economy entered a technical recession in the first quarter of the year, with gross domestic product declining 0.2pc, following a 0.3pc drop in the final quarter of 2011. The weaker growth has started to weigh on prices as retailers sacrifice profit margins in a bid to draw in cash-strapped consumers. The British Retail Consortium (BRC) Shop Price Index fell to 1.1pc in June, from 1.5pc in May, as the falling cost of crude oil and raw materials filtered through to store prices. Azad Zangana warned that this may only be a temporary easing however. The UK's inflation rate is only just beginning to reflect the weakness in the economy. Past increases in taxes have caused a squeeze on household spending power, which in turn is forcing retailers and service providers to scale back price increases," they said. "Though the sudden fall in the headline rate will raise some concerns over the health of the economy, the Office for National Statistics has had problems reporting price information when retailers use heavy discounts during the "sale season." As a result, this could prove to be a temporary downwards blip in the inflation data.