UK consumer price inflation slowed to 2.6% in the year to June, down from 2.8% in May, according to new data from the Office for National Statistics.
The decline was primarily driven by lower fuel prices, which helped offset persistent pressures in other sectors.
The data reinforces the narrative that inflation is gradually returning to the Bank of England’s 2% target, though the pace of disinflation remains gradual.
Economists had broadly expected a slight moderation in the annual rate, and the print came in line with consensus forecasts.
The data reinforces the narrative that inflation is gradually returning to the Bank of England’s 2% target, though the pace of disinflation remains gradual.
With the headline rate still above target, policymakers are likely to remain cautious about cutting interest rates further, balancing the need to support growth against the risk of entrenched price pressures.
The market reaction was muted, with gilt yields showing little movement as traders had already priced in a modest decline.