Full Breakdown
UK Inflation Slips to 2.6% in June as Fuel Prices Fall
7/22/2026, 8:04:36 AM
June Inflation Figures
The Office for National Statistics (ONS) reported that the consumer-price index fell to 2.6% in the 12 months to June, down from 2.8% in May. The decline follows a 2.1-pence-per-litre drop in the average price of petrol, now £1.553 per litre, and a 10.7-pence-per-litre fall in diesel to £1.764 per litre between May and June. The ONS linked the slowdown chiefly to lower motor-fuel costs, especially diesel, as well as reduced clothing and food prices.
Drivers: Fuel Markets and Government Measures
The dip in fuel prices coincided with a temporary lull in the US-Israel-Iran conflict that began on February 28, during which the Strait of Hormuz reopened and global oil prices slipped below $90 a barrel. The government’s recent cost-of-living actions—cutting VAT on domestic electricity bills and announcing a £2 cap on bus fares from January—were also highlighted as supporting the inflation trend.
Official Responses
He emphasized the VAT cut and bus-fare cap as “a win-win” for keeping inflation down while helping households afford essentials. Prime Minister Andy Burnburn framed the lower rate as a platform for his administration’s broader economic agenda.
Outlook and Risks
The International Monetary Fund (IMF) projected inflation could rise toward 4% by year-end in its World Economic Outlook. Bank of England officials remain wary; several Monetary Policy Committee members have signalled that persistently above-target inflation may prompt a rate increase from the current 3.75%. Renewed hostilities in the Middle East, which have already pushed Brent crude above $90 a barrel, pose an additional risk to the inflation trajectory.
Verbatim Quote
“Both these changes are a win-win. They help keep inflation down, while helping people afford the essentials.” — Joe Nellis, the economic adviser at the accountancy firm MHA — Joe Nellis, the economic adviser at the accountancy firm MHA.
