- UK inflation is anticipated to have eased in June, with official Consumer Prices Index (CPI) figures due to be published on Wednesday, offering a temporary boost for the new prime minister, Andy Burnham.
- The expected slowdown in inflation, from 2.8% in May to an estimated 2.7% in June, is primarily attributed to a significant drop in petrol and diesel prices, with diesel falling over 16p per litre in June, the largest monthly decrease since 2000.
- This decline in fuel costs was driven by news of an interim ceasefire deal between the US and Iran, which caused oil prices to fall below pre-crisis levels, alongside a temporary step-down in household energy inflation.
- Despite the June easing, economists warn of a 'bumpy path' ahead, as the new Ofgem energy price cap, effective from July, increased typical household bills by 13% to £1,862 annually, and rising Middle East tensions have already pushed Brent crude oil prices up in July.
- In response to cost-of-living pressures, prime minister Andy Burnham announced that electricity bills will be VAT-free from October 1, a measure expected to save households approximately £45 per year and reduce CPI inflation by around 0.1 percentage points.
IN FULL
