LONDON British annual consumer price inflation fell to a lower than expected 7.9% in June, 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 June would drop to 8.2% from May's 8.7%, 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 in May it expected inflation in June would fall to 7.9%.

Core inflation - a measure which excludes food, energy, alcohol and tobacco prices and which the BoE watches closely to gauge underlying price pressures - also dropped by more than expected, coming in at 6.9% from May's 7.1%, its joint highest in more than 30 years.

Economists polled by Reuters had expected the core measure of price growth to hold at 7.1%.

(Writing by Kate Holton)