Financial News: U.K. Inflation Slows To 15-Month Low

U.K. Inflation Slows To 15-Month Low

07/22/2026 - 09:34:00 (RTTNews)

(RTTNews) - U.K. consumer price inflation slowed to the lowest since March last year on transport and food prices in June, data from the Office for National Statistics showed Wednesday.

The consumer price index climbed 2.6 percent year-on-year in June, slower than the 2.8 percent increase in May. Prices were expected to climb 2.7 percent.

On a monthly basis, consumer prices edged up 0.1 percent, as expected, compared to an increase of 0.2 percent in May.

Core inflation that excludes energy, food, alcohol and tobacco remained unchanged at 2.6 percent in June.

Although inflation is set to rise towards 3.5 percent later this year, the Bank of England is likely to keep rates on hold throughout 2026, ING economist James Smith said.

"Today's data shows the pace of inflation eased largely due to a dip in fuel prices," British Chambers of Commerce Research Manager Stuart Morrison said. "But geopolitical tensions suggest that could be short lived," Morrison added.

The BoE is set to announce its next policy decision on July 30. The latest data suggest that the bank is set to hold the benchmark rate at 3.75 percent.

Goods prices increased 1.7 percent after rising 2.0 percent and services inflation eased to 3.6 percent from 3.7 percent.

The ONS said transport, and food and non-alcoholic beverages made the largest downward contributions to the annual inflation rate.

Food and non-alcoholic beverages prices moved up 1.7 percent, the lowest since August 2024. Prices in the transport division climbed at a slower pace of 5.7 percent.

Separately, output price inflation slowed to a three-month low of 3.5 percent in June from 3.7 percent in May. Output prices remained flat from May.

At the same time, input price inflation slowed for the first time since January 2026. Input prices rose 7.3 percent, following a 9.3 percent rise in the previous month. On a monthly basis, input prices fell 2.0 percent.

Another data showed that house price growth softened in May. Average house prices grew 2.7 percent year-on-year, following a 3.9 percent rise in April.

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