UK inflation dropped to 2.6% in June, falling to its lowest level in over a year. According to the Office for National Statistics, consumer prices were down from a 2.8% inflation rate seen in both April and May.
The decline was driven by lower costs for food and motor fuel, including a decrease in gasoline prices. However, this reprieve for households may be short-lived, as a return to hostilities in the Middle East threatens to push energy prices higher.
The figures provide a boost for Prime Minister Andy Burnham’s efforts to improve the economy and reduce the cost of living. To increase disposable income for households, the new prime minister has pledged a winter VAT holiday on electricity bills and a reduction in the national cap on bus fares.