UK inflation falls to 2.6% in June as fuel prices drop, giving new Prime Minister Andy Burnham a boost amid cost-of-living concerns
LONDON: Britain’s annual inflation rate fell more than expected in June, driven by lower fuel prices, official data showed Wednesday, in a boost to new Prime Minister Andy Burnham.
The Consumer Prices Index rose by 2.6 percent in the 12 months to June, down from 2.8 percent in May, the Office for National Statistics said in a statement.
Analysts’ consensus forecast had been for a slowdown to 2.7 percent last month.
Much of the fall was a result of petrol and diesel prices easing as crude prices tumbled in the wake of the ceasefire between the US and Iran.
However, analysts expect the dip to be short-lived as fresh fighting in the Middle East this month led to the collapse of a preliminary peace deal, pushing oil prices back up.
Andy Burnham, who became prime minister on Monday, has pledged to ease cost-of-living pressures, unveiling an energy tax cut on his first full day in the job.
“Falling inflation is news families want to hear but there is much more to do to give people the breathing space they need,” said newly appointed finance minister John Healey.
“We have chosen to focus on the cost of living in our first week, signalling that concern for working people will be at the heart of everything we do,” he added.
Keir Starmer resigned as prime minister and Labour party leader last month, bowing to months of internal pressure to step down after a series of scandals, missteps over the economy and policy U-turns.
“Higher inflation is still coming,” said Paul Dales, chief UK economist at Capital Economics.
“The lagged effect from high energy prices will probably lift inflation above 3.0 percent in September and to about 3.5 percent early next year,” he said.
