UK Annual Inflation Falls More Than Expected to 2.6% in June
| Pair | Now | Since publish |
|---|---|---|
| GBPUSD | — | — |
| EURGBP | — | — |
- UK inflation hits 15-month low of 2.6% in June.
- Fuel/food cheaper, but factory/rental costs signal persistent pressure.
- 2.6% rate may temper BoE rate hike bets.
UK annual consumer price inflation decreased more than anticipated in June, falling to 2.6% year-on-year. This figure is down from 2.8% in May and below the 2.7% forecast, marking the lowest inflation rate in over a year. The decline was primarily driven by cheaper motor fuel, alongside subdued food and services inflation, with food prices falling for the second consecutive month. This data point may weaken the argument for further interest rate increases by the Bank of England, despite some expectations for inflation to rise towards 3.5% later in the year. On a monthly basis, consumer prices rose 0.1%, aligning with expectations and slowing from 0.2% in May.
UK annual inflation reached a 15-month low in June, slowing to 2.6% from 2.8% in May, primarily driven by lower transport, food, and fuel prices. Data from the Office for National Statistics (ONS) also showed monthly consumer prices rose 0.1%, as expected, down from 0.2% in May. However, underlying inflationary pressures persist from factory and rental costs, indicating that the overall pressure has not fully lifted despite the headline fall.