UK inflation falls to 2.6% in June

(Sharecast News) - UK consumer price inflation slowed a touch more than expected in June, according to figures released on Wednesday by the Office for National Statistics. Inflation eased to 2.6% in the 12 months to June from 2.8% in May. Economists were expecting a slightly smaller dip to 2.7%.

The ONS said transport, and food and non-alcoholic beverages made the largest downward contributions to the change.

Core CPI - which excludes energy, food, alcohol and tobacco - rose 2.6% in June, unchanged from May.

Martin Sartorius, lead economist at the Confederation of British Industry, said: "Inflation ticked down slightly in June, broadly in line with our latest projection. We expect this easing will prove temporary. Inflationary pressures are likely to firm over the next few months, reflecting the ongoing impact of the Iran conflict on energy bills and some passthrough to domestic prices. Renewed tensions in the Middle East mean that households and businesses will continue to face an uncertain and volatile outlook as we head towards autumn.

"We anticipate the Bank of England's Monetary Policy Committee to keep interest rates unchanged when it meets next week, as it maintains a 'wait and see' approach to the economy. Although risks remain elevated, a loosening labour market, soft domestic activity, and tighter financial conditions mean that the Committee is unlikely to raise rates in the near term."