The core inflation rate-which excludes the most volatile products such as food, alcohol and gasoline-also remained unchanged at 2.4%, but down from May's 2.6%.
As inflation unexpectedly held steady at 2.6% on the year in July this further undermined bets that the Bank of England (BoE) could still raise interest rates before the end of the year. June had marked the first time that inflation had fallen back since April 2016 (when it was just 0.3%).
The Pound to US Dollar exchange rate today: +0.2% at 1.28931, Best 24hr rate 1.29021.
Against the euro, the pound dropped 0.3% to €1.097.
Britain's biggest energy supplier, British Gas, plans to increase electricity prices by 12.5 percent next month.
Against the euro, sterling fell 0.4% to 1.0964 euros.
ONS figures on Tuesday also showed a modest slowdown in house price inflation, which edged down to 4.9 percent, its lowest since March's three-year low of 3.9 percent. Michel Barnier will be marking the work and we can expect him to get his red pen out.
Even so, any imminent rate hike remains dependent on continued signs of strength from the United States economy, putting the emphasis back on domestic data releases.
The ONS will on Wednesday publish its latest unemployment data, which are widely expected to show that wage growth has failed to keep pace with inflation.
British inflation steadies as Brexit impact fades
Two figures will be key: Wages and employment. Nevertheless, consumers continue to face a considerable squeeze on their purchasing power - there is little doubt that inflation of 2.6% in July will still have been clearly above earnings growth, which will likely be close to 2%.
"Inflation was limited in July by lower motor fuel prices".
Smith believes this will be a consideration for the Bank.
Yesterday's United Kingdom consumer price index data disappointed markets, after showing price growth hold steady on the year for both the overall and core variants.
Separately, figures from the Office for National Statistics showed that British house price inflation eased for the second straight month in June, though slightly.
"Even if the government intervenes for political reasons and limits the increase to, say, 3 per cent, a £5,000 season ticket will still cost an extra £150 a year in January".
'Some unregulated fares are likely to go up much more.
Official data to be released at 0830 GMT today are expected to show that earnings continue to increase at less than the rate of inflation in the United Kingdom, potentially reducing consumer spending and the overall growth of the economy in the third quarter.
Recent retail data suggested that households were scaling back on non-essential purchases in order to cope with rising grocery bills, so increasing earnings is desperately needed if spending is to continue driving the economy.
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