Britain's consumer price index (CPI), a main gauge of inflation, dropped to 2.8 percent in July, lower than the 2.9 percent in the previous month, official figures showed on Tuesday.
The inflation rate is still higher than the 2-percent target set by the central bank.
The Office for National Statistics (ONS) attributed the fall to the price decline in air fares, as well as price drop in the recreation and culture, and clothing and footwear sectors.
However, a rise in petrol and diesel prices partially offset the fall of the inflation in the country.
According to the ONS figures, prices of recreation and culture goods fell by 0.4 percent between June and July, compared with a rise of 0.2 percent a year earlier, and prices of clothing and footwear were down by 3.2 percent between June and July compared with 2.6 percent a year ago.
The ONS said the other main inflation measures moved in a similar fashion to the CPI.
The rate of retail price index (RPI) inflation also dropped to 3.1 percent in July compared with 3.3 percent in June.
July's fall in annual CPI inflation from 2.9 percent to 2.8 percent is likely to presage the start of a sustained drop, said Martin Beck with the Capital Economics Ltd.
Beck said that other indicators pointed to further falls in inflation ahead as the producer prices figures also released Tuesday confirmed that price pressures at the very start of the inflation pipeline remained subdued.
Although there are growing signs of economic recovery, Beck believed that the degree of slack in the economy will help push down CPI inflation close to the central bank's target by the end of the year.
Britain's output price index for goods produced by manufacturers, also known as factory gate prices, rose 2.1 percent in the year to July, compared with a rise of 2.0 percent in the year to June, and was up 0.2 percent between June and July.