Inflation Slips to 2.6 Per Cent, a 15-Month Low, as Fuel Falls
Inflation fell to 2.6 per cent in the year to June, down from 2.8 per cent in May and below the 2.7 per cent economists had expected, official figures showed. It is the lowest reading since spring 2025, driven chiefly by cheaper diesel and petrol, with food and clothing prices also easing. The figures hand the new Prime Minister an early, if fragile, boost as he presses his cost-of-living measures.
The Office for National Statistics attributed the slowdown mainly to falling motor-fuel prices during June’s brief lull in the oil market; its chief economist, Grant Fitzner, said cheaper diesel, chocolate, margarine and beef, plus early summer sales on clothing, had eased the figure. Food inflation fell to 1.7 per cent, its lowest in nearly a year. But the relief looks temporary: the Ofgem price cap rose 13 per cent on 1 July, oil has since rebounded above $92, and forecasters expect headline inflation to climb back towards 3.4 per cent by November. Core and services inflation stayed sticky, keeping the Bank of England wary. Watch the Bank’s rate decision on 30 July.