UK inflation drops to 2.6% in June, lowest since March 2025

The United Kingdom's annual inflation rate dropped to 2.6% in June, marking its lowest level since March 2025. The figure, announced by the Office for National Statistics (ONS), came in slightly below economists' expectations of 2.7% and represented a decrease from the 2.8% recorded in May.

Core inflation, which excludes volatile energy and food prices, remained unchanged year-on-year at 2.6%. Meanwhile, inflation in the services sector saw a slight deceleration, easing to 3.6% in June from 3.7% in the previous month.

On a monthly basis, inflation registered at 0.1%. The ONS noted that the decline was primarily driven by falling prices in the transport and food sectors. Chief Economist Grant Fitzner highlighted that not only food prices but also those in the clothing sector decreased in June. He added that falling oil prices led to a reduction in raw material costs for the first time since January.

This easing inflation trend could influence future monetary policy decisions by the Bank of England as it seeks to manage price stability.

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In June, in addition to food prices, prices in the clothing sector also decreased, and due to the decline in oil prices, raw material costs decreased for the first time since January.