UK inflation fell to 7.9% in June, according to the latest ONS figures, down from 8.7% in May and coming in below expectations.
With hopes that this means a turning point for stubbornly high inflation, reduced motor fuel and food prices drove the decrease – the lowest inflation has been since March 2022.
Core inflation, meanwhile, which takes out energy, food, alcohol and tobacco to give a clear picture of underlying trends, was down from 7.1% to 6.9%.
Commenting on June’s inflation figures, Editorial and Research Fellow at the free market think tank the Institute of Economic Affairs, Professor Len Shackleton, said: “If last month’s 8.7 per cent annual increase in the CPI was unexpectedly high, this month’s 7.9 per cent is a shade lower than expected. This is mirrored in other indicators such as CPIH and core CPI.
“Since these figures were tallied, Russia has ended a deal to allow grain exports from Ukraine, which will likely push up global and UK food prices. Mortgage rates have also gone up. Nevertheless, since the extraordinary increases in the money supply that ultimately fuel inflation have ended, inflation is set to fall further.
“Rishi Sunak’s pledge to halve inflation by the end of the year may still be optimistic, but at least there are no grounds for the Bank of England to raise interest rates further. Nor are there any grounds for panic measures to hold down prices artificially, such as Grant Shapps’ silly initiative to curb supermarket petrol prices.”
