Lower utility bills pushed Britain's inflation rate, as measured by the Consumer Price Index, down to 2.4 per cent in the year to June, compared with 2.5 per cent in the 12 months to May. Consumer prices rose 0.2 per cent on the month.

Inflation has been above the Bank of England's target of 2 per cent since April last year, peaking at 3.1 per cent in March. The figures were higher than the City anticipated. "A slightly disappointing number," said Ross Walker, economist at RBS. "The hawks will take that as a sign that we need more policy-tightening."

Concerns centre on the "core" measure of inflation, which strips out one-off and seasonal items from the CPI, excluding energy, alcohol, food and tobacco prices. On this measure inflation rose a tenth of a point to an annual 2.0 per cent, its highest since March 1997. It is this that has left economists convinced that a further quarter-point increase in interest rates will be imposed.

"The figures are disappointing and leave open the risk of another interest rate increase sometime in the autumn," said Philip Shaw, chief economist at Investec.

Karen Ward, UK economist at HSBC, added: "We believe strong sterling, and a slowdown in consumer spending, will be enough to contain inflationary pressures later in the year. But the Bank aren't taking any risks, and will continue raising rates in the meantime. We expect another hike in September."

The main downward pressure on the CPI came from energy prices, as last year's hefty increases in gas and electricity bills have begun to be reversed. (Even so, they are 60 per cent up on March 2004.) More energy price cuts are expected to feed through in coming months, though renewed strength in the oil price may in time reverse those improvements. Indeed, petrol and diesel had the biggest upward impact - highly "visible" inflation that tends to strengthen inflationary expectations, which will worry the Bank of England.

Somewhat to the bemusement of the official statisticians, furniture prices are looking freakish, with a 12.5 per cent rise on the year, the highest rate since 1980. One suggestion is that retailers are establishing higher prices now in order to have impressive mark-downs in the summer sales, a regular phenomenon, but for some reason much amplified this year.

The all-items Retail Price Index rose by 4.4 per cent, up from 4.3 per cent in May, reflecting the increased costs of mortgages.

This month the Bank of England raised interest rates for the fifth time since last August, to a six-year high of 5.75 per cent, in order to rein in inflationary pressures. Today sees the publication of the minutes of the last meeting of the Monetary Policy Committee. A Reuters poll showed that economists expected the minutes to show a 6-3 vote in favour of increasing the base rate to 5.75 per cent, indicating a "swing" of one MPC member to the hawkish tendency.