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UK Inflation 2.6% as VAT-Free Power, £2 Bus Cap

7/26/2026

38 9 Full Breakdown

Summary

Story summary

UK inflation fell to 2.6 % in June 2026, its lowest level in 15 months and under the 2.7 % forecast.
Core CPI held at 2.6 % while services inflation stayed at 3.6 %.
Prime Minister Andy Burnham announced VAT-free electricity bills from 1 October, saving £45 a year and trimming CPI by 0.1 percentage point.
Chancellor John Healey said bus fares will be capped at £2 across England from January.

History

Historical Context

Britain’s habit of using policy shortcuts dates to the 1992 ERM crisis, when Chancellor Norman Lamont and the Bank of England raised rates to 12% while inflation hovered near 11%. After the 2020 pandemic-driven slump, the 2026 VAT-free electricity plan and £2 bus-fare cap announced by Prime Minister Andy Burnham and Chancellor John Healey echo that legacy of ad-hoc measures to curb CPI.

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Story summary

UK inflation fell to 2.6 % in June 2026, its lowest level in 15 months and under the 2.7 % forecast.
Core CPI held at 2.6 % while services inflation stayed at 3.6 %.
Prime Minister Andy Burnham announced VAT-free electricity bills from 1 October, saving £45 a year and trimming CPI by 0.1 percentage point.
Chancellor John Healey said bus fares will be capped at £2 across England from January.

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