Consumer price inflation in the UK remained at 2% in June, unchanged from May, according to the latest official data.
Summer clothing sales and less expensive second-hand cars helped to offset higher prices in restaurants and hotels.
It means that overall price rises are in line with the Bank of England’s target rate.
Food inflation is continuing to come down, with prices of food and non-alcoholic drinks rising by 1.5% in the year to June, down from 1.7% in the year to May. Last month’s figure is the lowest annual rate since October 2021, when it was 1.3%, and compares with 17.4% a year ago. The annual rate eased for the 15th consecutive month from the high of 19.2% in March 2023, the highest annual rate seen for over 45 years.
With interest rates still at a 16-year-high of 5.25%, rate-setters at the Bank of England will consider the inflation data when deciding whether to vote for a reduction on 1 August.
Analysts noted that the underlying measures of inflation also did not change in June. Core inflation, which excludes volatile elements such as energy and food, remained at 3.5% and the cost of services grew by 5.7%, the same as a month earlier.
Market expectations are “on a knife edge” as to whether there will be a cut in August, Sky News reported.
