Good afternoon. Welcome to our live coverage ahead of the Office for National Statistics releasing its latest monthly Consumer Prices Index (CPI) inflation data tomorrow (22 July).
The war in Iran had stoked fears inflation would rise, but it has trended downwards in recent months and held below 3% in April and May. What can we expect from the June data?
Stay with us as we bring you rolling build up commentary, as well as reaction and analysis after it is published.
Economists at research firm Pantheon Macroeconomics predict Consumer Prices Index inflation will slide to 2.6% in June.
Meanwhile, Deutsche Bank expects the CPI measure to slow to 2.7%, before rising after.
When is UK inflation data announced?
UK inflation data for the 12 months to June 2026 will be announced at 7am.
We will bring you live analysis and reaction to the ONS data tomorrow morning following its release.
What is inflation?
You’ll see the term inflation bandied about a lot, but not everyone knows what it means.
A third of Brits can’t give a definition of the word, according to recent research carried out by investing platform XTB.
So, what is inflation? Put simply, it’s a measure of how much prices have risen over a given time period.
For example, if you bought something for £1 and it was worth £1.05 a year later, the rate of inflation will have been 5%.
While prices going up sounds bad – and above a certain level it is – economists generally agree that a small amount of inflation is healthy for an economy.
This is why the Bank of England, like most central banks, targets an inflation rate of 2%.
What do you think inflation will be?
It’s time to get your predictions in. What do you think the inflation data tomorrow will look like?
Where has inflation been?
The CPI measure of inflation has trended downwards from a high of 11.1% in October 2022.
Back then, soaring energy and fuel prices caused by Russia’s invasion of Ukraine and a surge in demand for consumer goods as economies across the globe emerged from the Covid-19 pandemic contributed to much higher inflation rates.
The CPI measure of inflation fell to 1.7% in September 2024, but has remained over 2% since.
This basket is updated once a year to keep up with consumer trends. In 2026, houmous and WiFi light bulbs were added while premium bottled lager and Euro Tunnel fares were ditched.
The basket of goods and services is designed to reflect what the average consumer buys and uses in day-to-day life.
CPI is just one measure of inflation. For example, the Office for National Statistics also has a Retail Price Index.
We’re going to end our coverage for today, but join us again first thing tomorrow when we’ll bring you live coverage of the ONS data release and, of course, reaction and analysis on what it means for you.
Good morning and welcome back to our live coverage of the latest Consumer Prices Index inflation data.
The Office for National Statistics will be releasing the data at 7am, so stay with us and we'll bring you everything as and when it happens.
BREAKING: UK inflation fell to 2.6% in June
Lower fuel prices drive fall in UK inflation
UK inflation fell to 2.6% in June, from 2.8% in May, with falling petrol prices one of the significant contributors.
“A fall in motor fuel prices, particularly diesel, helped ease inflation in June,” said the ONS chief economist Grant Fitzner.
“Food prices fell this month, driven by products including chocolate, margarine and beef,” he added. “Clothing prices also fell with the start of summer sales, with bigger discounts than last year.”
Core CPI remains unchanged at 2.6%
Core CPI, which strips out energy, food, alcohol and tobacco prices (which are often more volatile than other categories), remained at 2.6% in the 12 months to June.
Meanwhile, the CPI including owner occupiers’ housing (CPIH) rose by 2.8% in the 12 months to June, down from 3% in the 12 months to May.
CPI inflation at its lowest level since March 2025
The CPI measure of inflation slowing to 2.6% puts it at its lowest level since March 2025.
It has stayed around the 3% mark since then, but economists believe it will rise over the coming months due to rising energy prices.
Sanjay Raja, chief UK economist at Deutsche Bank, said: “Expect a bumpy path with energy prices back on the rise. While we're nowhere close to the peaks seen during the height of the Iran conflict, the energy disinflation path remains uncertain.”
A deeper dive into the June figures
One of the largest contributors to the CPI measure of inflation slowing to 2.6% in June was a fall in the price of fuel, particularly diesel.
The average price of unleaded petrol, including VAT, fell from 159.48p per litre on 29 May to 155.89p on 15 June, according to the RAC.
The average price of diesel, including VAT, fell from 191.54p on 15 April to 176.77p on 15 June.
The average price of diesel has fallen, putting downward pressure on UK inflation
(Image credit: alvaro gonzalez via Getty Images)
Grant Fitzner, chief economist at the ONS, said the cost of raw materials dipped for the first time since January, mainly due to the lower price of Crude oil.
Food and non-alcoholic drink price growth slowed to 1.7% in the 12 months to June also, down from 2.2% in May. The annual rate in June was its lowest since August 2024.
New chancellor John Healey still facing ‘notable’ inflation headache
Today’s figures, on the face of it, are positive, with inflation closer to the Bank of England’s government-set 2% target.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales (ICAEW), however, has warned the July data could be more negative, in part due to a rise in energy bills.
The Ofgem price cap rose by 13% on 1 July, covering the July to September period, with the average dual-fuel household on a standard tariff seeing their bills rise to £1,862 a year.
Thiru said: “June’s slowdown is a false dawn as it may have already been reversed this month with higher energy bills, following Ofgem’s energy price cap rise, likely to have lifted inflation above 3%.
“Though stubborn services and core inflation suggest that the UK remains exposed to the inflationary fallout from the Iran war, weaker wage growth and a sluggish economy will help blunt any second‑round effects."
Thiru added: "Elevated inflation will likely become a more notable economic headache for the new chancellor in the coming months by deepening the cost‑of‑living crunch, while also squeezing his fiscal headroom, raising borrowing costs, and increasing financial market volatility."
What does inflation mean for your money?
Inflation figures published by the Office for National Statistics are backward-looking and reflect what people across the economy spend on everyday goods and services.
If the rate of inflation is rising, it means these goods and services have become more expensive.
It also means the value of your money is gradually being eroded in real terms as the same amount of money is worth less and less.
Why it’s worth looking past the headline UK inflation figure
Because the Consumer Prices Index measure of inflation is based on price rises across a basket of 760 goods and services, it’s worth looking past the headline figure to find out how inflation is affecting you personally.
Your experience of inflation will be different to someone else who buys different goods and uses different services.
For example, this month’s figures show a large drop in the price of diesel – if you’re someone who drives a diesel car a lot, you’ll notice a bigger change in your cost of living than someone who doesn’t.
The June figures show inflation across the restaurant and hotels sector rose to 4.4%, from 4.2% in May – if you’re someone who eats out a lot or travels across the UK a lot for work, you will have noticed a bigger dent in your budget relative to the average consumer.
What does the latest UK inflation data mean for interest rates?
The Bank of England’s Monetary Policy Committee (MPC) will be watching today’s inflation figures closely ahead of announcing its latest base rate decision on 30 July.
A drop in the pace of inflation in June would suggest the MPC is more likely to lower interest rates next week, however with fears inflation could rise in July, the MPC may decide to take a more hawkish approach.
Jeremy Batstone-Carr, European strategist at Raymond James Wealth Management, said the recent re-escalation in hostilities between the US and Iran will also “likely be on the Bank of England’s mind”, with upward pressure expected on prices over the coming months.
However, he added that the MPC would be wary of stimulating growth in the UK economy, with the latest figures showing GDP rose by just 0.1% in May.
A quick recap
If you’re just joining us, the key takeaway from this morning is that the Consumer Prices Index measure of inflation slowed to 2.6% in the 12 months to June, from 2.8% in May.
One of the main downward pressures on prices was a drop in the price of fuel, particularly diesel.
However, the drop is expected to be short-lived, with economists and experts warning inflation could tick upwards in July, partly due to a 13% rise in the Ofgem price cap.
What savers need to do now
It’s worth checking if you’re getting the best rate on your savings account – anything below the 2.6% rate of inflation and you’re losing money in real terms.
There are currently 1,960 savings accounts that beat inflation, according to data firm Moneyfactscompare, including 284 easy-access accounts.
If you’ve got emergency savings sitting in an account paying less than 2.6%, you should move them into one paying a higher rate.
Adam French, head of consumer finance at Moneyfactscompare, said: “For many savers, what matters most isn't whether savings rates rise or fall in isolation, but whether they stay ahead of inflation, and as things stand, they are doing just that and allowing many households to preserve or grow their purchasing power.”
Mortgage rates ‘likely’ to rise further despite lower inflation
David Hollingworth, associate director at mortgage broker L&C Mortgages, said recent rises in mortgage rates aren’t likely to abate despite today’s positive inflation data.
Mortgage rates have started increasing, in part, due to renewed tensions between Iran and the US, pushing up lenders’ wholesale funding costs.
Hollingworth said the June inflation data would be welcome news for borrowers and the fall could take some pressure off the Bank of England to raise interest rates in the near-term, but it is “likely” mortgage rates will continue to rise.
He added: “Borrowers shouldn't feel they have to panic, but they also shouldn't delay reviewing their options. Mortgage rates can move quickly, as we have seen over the past week, so anyone approaching the end of their current deal or planning to buy a home should consider securing a competitive rate sooner rather than later.
“Most lenders will still allow borrowers to switch to a cheaper deal before completion if rates ease again, giving them certainty now and flexibility if the market moves in their favour later down the line."
Mortgage rates have started rising after renewed tensions between the US and Iran
(Image credit: Getty Images)
Do you think CPI inflation will rise in July?
Why prices are still rising despite inflation slowing
Despite the June data showing inflation slowing to 2.6% from 2.8% in May, prices are still rising, just at a slower pace.
And while the rate of inflation has dropped from highs of 11.1% in 2022, households will likely still be feeling the impact of higher costs built up since then.
Take one look at how much the price of the weekly grocery shop has gone up, for example. According to the ONS, cumulatively, food prices rose by 38.6% between November 2020 and November 2025.
How does the UK’s CPI rate of inflation compare to other countries?
The UK CPI inflation rate in June was lower than the EU’s, but higher than Germany’s and France’s.
France’s June inflation data gave a reading of 2% while in Germany CPI inflation stood at 2.4%. Across the EU, inflation was 2.9% in June, down from 3.3% in May.
CPI inflation in the UK is higher than in Germany and France
The shadow chancellor, Mel Stride, has said inflation remaining above the Bank of England’s 2% target is “deeply concerning” for families.
He said: "Labour's tax hikes and reckless borrowing stoked inflation, and Andy Burnham has already made billions of pounds of spending commitments without any plan to pay for them.
“[The] Conservatives are the only party that have set out a credible plan to cut spending, cut taxes and get Britain working again.”
When will the next inflation data be published?
The ONS publishes inflation data each month for the preceding month – that’s why the data released today covers the month of June.
The ONS will release inflation data for July on 19 August.
You can find out when the ONS is set to release inflation, GDP and wages data on its website.
We're going to end our inflation coverage here for today. Thank you for following, and visit our homepage for all the latest personal finance and investing news.
