What does the UK’s falling inflation rate mean for you?

Although best-buy savings rates are often over 6% with inflation remaining higher the value of any money you keep in an account is still effectively falling. Photograph: Gareth Fuller/PA

The UK inflation rate fell back to 7.9% in June. That meant it was lower than economists expected, but it was the 23rd month running that the main consumer prices index (CPI) has overshot the Bank of England’s 2% target. Although down from its recent peak of 11.1% in October, it still means the cost of living is rising rapidly.

What does the inflation rate mean?