LOWER clothing prices due to an increased number of special offers helped reduce the annual rate of inflation last month, figures have shown.

The cost of adults' and children's clothing recovered more slowly from the summer sales than last year, contributing to a 0.1 per cent fall in the Consumer Prices Index (CPI) to 1.3 per cent.

Lower prices of toys, computer games and consoles also helped push the figure down, the Office for National Statistics (ONS) said.

The fall in the inflation rate was in line with analysts' forecasts, although a key Bank of England report recently showed inflation would rise in the coming months to meet the Government's target of two per cent in two years.

Other downward pressure came from food, mainly vegetables, as a result of significantly increased sales during last year's hot summer.

In contrast, the cost of housing, water, electricity, gas and other fuels rose last month due to a rise in the price of heating oil.

The CPI, which differs from the former measure the Retail Price Inflation (RPI) because of the absence of housing and council tax costs, was last lower in April, when the annual rate fell to 1.2 per cent.

Analyst Philip Shaw, of Investec Securities, said the figures came as no surprise.

"The key thing was the relative lack of price recovery of clothing and footwear, which reinforces the message that retailers are having a tough time at the moment."

He said the recent poor weather was a factor.

Mr Shaw said the latest fall would give the Bank of England's monetary policy committee breathing space, allowing it to observe what impact previous interest rate rises are having before deciding whether to intervene again.

Rates have risen five times since November amid fears of rising inflation and spiralling household debt.