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UK inflation slows to 2.6% in June as fuel and food prices fall
The UK’s Office for National Statistics attributed the slowdown to lower fuel costs, while fuel price uncertainty remains due to shifting Middle East tensions and Ofgem’s energy cap changes.
The UK’s inflation rate eased to 2.6% in the year to June, down from 2.8% in the year to May, the Office for National Statistics said, helped by softer fuel and food prices.
Food costs fell, with declines in categories including sugar, chocolate and confectionery, while the price of clothes dropped in part due to start of summer sales with bigger discounts than last year. Food and non-alcoholic beverages fell 0.2% month to month, although meat and vegetable prices rose in June, with a smaller increase than a year earlier.
BBC Business said the pullback also reflected lower costs for oils, fats and dairy compared with a year earlier. The ONS noted that food inflation can lag because of supply chain effects.
The outlet also linked the fuel story to international developments, saying pump prices fell in June after the US and Iran agreed to halt military operations and allow the Strait of Hormuz to reopen, though renewed hostilities and a jump in crude oil prices could lift inflation later. Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, called June a “false dawn,” adding that higher energy bills from Ofgem’s price cap could push inflation up again, even as she said the data reduces the case for a Bank of England rate increase in July.
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