Inflation Was Down To 2.6% In June
The UK inflation rate was 2.6% in June, signalling the first fall since October 2016. The unexpected drop from 2.9% has been attributed to lower fuel prices, which have fallen for the last four months in a row.
However, Jonathan Athow, Deputy National Statistician at the Office for National Statistics, has pointed out that “the rate remains higher than in the recent past.”
Indeed, inflation at 2.6% is still higher than wage inflation, which sits at 2%. This squeeze on spending power has been rising since last year’s Brexit referendum, which made imports more expensive due to the falling value of the pound.
Nevertheless, the declining inflation rate will come as good news to consumers. There had been fears of inflation going beyond 3%, and interest rate rises have also been speculated upon. For now, the news of inflation dropping from 2.9% to 2.6% is a welcome development.