When Mervyn King recently said that the fall in the exchange rate was helpful the governor of the Bank of England was merely stating an obvious truth.

ECONOMIST: The return of thrift

Despite the fall in June's inflation rate, the figures mean the CPI rate has still overshot the Bank of England's 2% target for 35 of the past 41 months.

BBC: UK CPI inflation in surprise fall to 4.2% in June

He added that although there are indications that the inflation rate may fall considerably in 2012, the bank and the government "have got a very, very nasty period in the middle".

BBC: Inflation casts shadow over bank rate decision