UK inflation falls to 2.6%, driven by lower fuel prices, but drop not expected to last

Summary

The UK inflation rate fell to 2.6% in the year to June, new figures show
The drop was driven by lower motor fuel prices, especially diesel - pizza and margarine prices are also down
But falling inflation is unlikely to last, our correspondent Kevin Peachey writes
The Bank of England's target for inflation is 2% - Chancellor John Healey says today's fall is "news families want to hear", but shadow chancellor Mel Stride accuses the government of stoking inflation
Inflation measures the increase in prices over time. A fall in inflation doesn't mean things are getting cheaper - it means the pace of price increases is slowing down

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Why has the UK inflation rate fallen?

Live Reporting

Edited by Caitlin Doherty and Dearbail Jordan

Inflation likely to fall - but not for longpublished at 06:55 BST 22 July
Ben King
Business reporter, BBC News

As we just reported, inflation numbers could see a temporary dip as a result of lower petrol and diesel prices.
June saw a period of relative calm in the US-Iran war, when Washington and Tehran agreed to halt military operations and reopen the Strait of Hormuz - a key route for global oil supplies.
This led to cheaper prices at the pumps.
Lower inflation is, however, expected to be short-lived. The price cap on gas and electricity rose in July, lifting the typical household energy bill by 13%.
Meanwhile, the resumption of military strikes in the Middle East has sent oil prices back over $90 a barrel. If it stays elevated, that risks inflaming inflation.
For now, much depends on how long the war continues, and how high energy prices remain.
Image source, Getty Images
Image caption,
A petrol forecourt on London on 29 May
Inflation was 2.8% in Maypublished at 06:53 BST 22 July

Last month, it was announced that the UK's inflation rate remained at 2.8% in the year to May, slightly lower than the 3% that had been predicted.
This means the prices of good and services in the UK, on average, were 2.8% more expensive in May compared to May of 2025.
That figure is above the Bank of England's target of 2%. It is, however, well below the 11.1% figure of October 2022, which was a 40-year high.
Following last month's announcement, former chancellor Rachel Reeves said the government had "the right economic plan to build a stronger more secure Britain".
Today's figure is expected to drop slightly - driven by lower petrol prices.

Latest UK inflation figure about to be releasedpublished at 06:48 BST 22 July

We're about to find out the latest UK inflation rate, when the Office for National Statistics releases the figures at 07:00 BST.
Inflation measures the increase in the price of goods over the last 12 months. The figure covers hundreds of everyday items.
Experts expect the figure to fall to around 2.6% - this means prices are still rising, just at a slower pace. In May, inflation was 2.8% for the second month in a row.
We'll bring you the figure as soon as we get it, along with analysis and reaction.