Inflation falls to 2.8% in ‘sluggish economy’

Falling fuel and food prices pushed inflation down to 2.8% in June as experts warn prices likely to rise driven by impact of higher gas and electricity bills, and prices at the pump on the upward trajectory again

Transport, food and soft drinks made the largest downward contributions to the monthly change, which dropped from 3% the previous month, marking the lowest inflation figure since the Iran war broke out, sending petrol and diesel prices soaring at the end of February. 

Despite the weekly shop still feeling like a painful experience with high prices across the shelves, food inflation was actually down for the first time in a while to -0.2% in June, against an annual rise of 1.7%.

Another contributor to the downward move was the cost of alcohol, which fell slightly on the back of extensive beer promotions during the opening week of the World Cup last month.

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