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UK inflation drops to 2.6% in June, beating forecasts
The easing was linked to falling fuel costs, and the government paired the data with a winter VAT holiday on electricity bills and a January bus fare cap.
UK inflation fell more than expected in June to 2.6%, according to the Office for National Statistics, providing momentum for the plans of UK Prime Minister Andy Burnham to reduce the cost of living.
The CPI figure outpaced forecasts for a drop from 2.8% in May to 2.7%, with weaker petrol and transport costs playing a key role. The ONS also pointed to lower clothing prices month on month during early summer sales, along with declines in transport and food prices.
Fuel prices, particularly diesel, declined amid an unstable truce in the Middle East conflict, which also influenced the inflation backdrop. The ONS said clothing and transport eased alongside food, though price increases in most other goods and services were more modest.
In response, UK officials highlighted cost of living measures, including a winter VAT holiday on electricity bills and an announced £2 cap on bus fares from January. The UK’s new chancellor said the government is focusing on keeping inflation down while improving affordability for essentials.