Lower clothing and footwear prices due to poor weather are poised to contribute to another fall in the rate of inflation today.
Discounting in the wake of weak sales volumes is expected to be behind a 0.1% fall in the Consumer Prices Index (CPI) to 1.3% during August.
The second consecutive drop in the index will come despite a rebound in petrol prices, as these also rose sharply a year ago.
Economists also expect increases in the prices of communication and household goods to offset some of the downward pressure, as they rebound from decreases last month.
Analyst Philip Shaw of Investec said a fall would not be unexpected by the Bank of England's Monetary Policy Committee.
He said the apparent turn in the household sector was likely to see the MPC postpone further hikes while it assesses the economy's new direction.
A key Bank of England report recently showed inflation is on track to meet its target of 2% in two years' time.
Tuesday September 14, 2004
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