LONDON British annual consumer price inflation slowed to 6.8% in July, figures from the Office for National Statistics showed on Wednesday.

Economists polled by Reuters had forecast that the CPI rate in the 12 months to July would drop to 6.8% from June's 7.9%, moving further away from October's 41-year high of 11.1% but still far above the Bank of England's 2% target.

The BoE said earlier this month that it expected inflation in July would fall to 6.8%.

The BoE is watching core inflation - which strips out volatile food and energy prices - and consumer services prices closely.

Core inflation remained at 6.9% in July, flat versus the June reading, and higher than expectations in the Reuters poll for a reading of 6.8%.

(Writing by William James, reporting by Andy Bruce and William Schomberg)