UK inflation slowed to 7.9% in June, the lowest level since March 2022, according to the Office for National Statistics (ONS).
The rate of price rises slowed more than expected in the 12 months to June, with falling fuel prices contributing to the slow-down, while food prices increased less quickly than in June 2022.
While the fall is welcomed, UK inflation is still high and far off Prime Minister Rishi Sunak’s target of halving the rate from around 10.7% in January.
While core inflation has dropped back after hitting a 30-year high in May, it is still well above the Bank’s official 2 per cent target – with further interest rate hikes expected in the months ahead in a bid to tame prices.
The government said the figures were finally “moving in the right direction”. Despite the better-than-forecast figures, chancellor Jeremy Hunt said “we aren’t complacent and know that high prices are still a huge worry for families and businesses”.
UKHospitality Chief Executive Kate Nicholls said:
“The rate of inflation reducing more than expected is good news for hospitality businesses, but it remains the case that food and energy costs are incredibly high.
“This reinforces that for inflation to fall further and faster, there needs to be more action to bring down those twin pressures of food and energy costs
“Hopefully today’s better than expected figures also give pause for thought on additional interest rate rises, which are already having a significant impact on the sector.”
Michael Kill CEO NTIA says:
“While we see a positive reflection in the inflation figures released today, dropping sharply to 7.9% in line with Bank of England predictions for June, against 8.7% in May.”
“We are some way off suppressing the cost inflation crisis suffered across the night time economy and hospitality sectors. While this news is a positive step in the right direction for businesses and particularly consumers, many within the sector are concerned that the increase of alcohol duty, energy and insurance costs which have yet to be tamed will eradicate any benefit to the sector in the short term.”
“It is important that the Government continue to engage with the sector over the coming months, and accept that there will need to be a fiscal intervention for businesses which are at the sharpest end of this crisis.”
