The Office for National Statistics (ONS) has announced that the UK's Consumer Price Index (CPI) inflation rate has decreased to 2.6% in June, down from 2.8% in May. This marks the ninth consecutive monthly decline in the inflation rate, which has been steadily easing since its peak in October 2022.
According to the ONS, the main contributors to the inflation rate decrease were lower prices for food, clothing, and footwear. The ONS reported that clothing prices fell by 4.6% in June, while food prices decreased by 0.5%.
The Bank of England has been closely monitoring the UK's inflation rate, which has been above the 2% target since January 2022. The Bank's Monetary Policy Committee (MPC) has kept interest rates at 4.5% for now, with a review expected in the coming months.
The drop in inflation rate is likely to bring some relief to UK households, who have been facing higher prices for essentials such as food and clothing. However, the UK's cost of living crisis continues to pose a significant challenge for many families, with household energy bills remaining a major concern.
The FTSE 100 index has reacted positively to the news, with the index rising by 0.5% in morning trading. This marks a small boost for UK investors, although the UK's stock market remains volatile due to ongoing economic uncertainty.