UK inflation eases to 2.6% in June

British consumer‑price inflation fell to 2.6 % in June, down from 2.8 % in May, as lower petrol and diesel prices and a moderation in food and non‑alcoholic drink prices pulled the headline CPI lower. The Office for National Statistics said transport costs were the main driver of the drop. Core inflation, which excludes volatile items, held at 2.6 %, indicating underlying price pressures remain sticky.

The slowdown gives new Prime Minister Andy Burnham an early boost for his cost‑of‑living agenda; his government has announced a VAT exemption on electricity bills from October and a £2 cap on bus fares from January. The Bank of England is expected to keep interest rates unchanged while monitoring the risk that renewed Middle‑East tensions could lift energy costs and push inflation higher later in the year.

Analysts warned that the dip may be temporary, noting that higher energy and fertilizer prices could cause food inflation to rise again, and that core CPI staying above expectations could keep policymakers cautious.