Inflation in Britain hits its lowest level in a year with fuel prices falling
The inflation rate in Britain fell to its lowest level in more than a year, affected by the decline in motor fuel prices, which eased some burdens on families, at a time when the new Prime Minister promised, Andy Burnham, by addressing the cost of living.
The Office for National Statistics reported on Wednesday that consumer prices rose by 2.6% during the 12 months ending in June 2026, a slight decrease from the 2.8% increase in the previous month. This is the lowest inflation rate since March of last year, and lower than economists’ average expectations of 2.7%.
Gasoline and diesel prices fell last month after a decline Crude oil prices amid hopes for an end to the US-Iranian war. Food and non-alcoholic beverage prices also contributed to lowering prices. Services inflation – an indicator of domestic pressures closely monitored by the Bank of England – fell to 3.6% from 3.7%, slightly above expectations.
However, the decline in inflation may be temporary, as economists expect a slight rise in inflation in July, after Britons were hit by a 13% increase in the price cap that sets household energy bills.
It is widely expected to keep The Bank of England (British central bank) leaves interest rates unchanged next week, as it attempts to balance the threat of rising energy prices, a weak labor market and slow economic growth.
The bank will present a new set of full forecasts to coincide with its decision on July 30, with markets currently anticipating one increase in interest rates this year, with a 60% chance of a second increase.
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