UK inflation cools further to 2.6% in June as transport and food prices ease

The United Kingdom's inflation eased further in June 2026, offering fresh signs that price pressures are gradually moderating, although underlying inflation remained resilient.

According to the latest official data, the Consumer Prices Index (CPI) rose 2.6 per cent in the 12 months to June, down from 2.8 per cent in May. On a monthly basis, CPI increased 0.1 per cent, compared with a 0.3 per cent rise in June 2025.

The broader Consumer Prices Index, including owner-occupiers' housing costs (CPIH), the UK's preferred measure of inflation, also slowed to 2.8 per cent in the 12 months to June, from 3.0 per cent in May. Monthly CPIH inflation stood at 0.2 per cent, lower than the 0.3 per cent increase recorded in the same month last year.

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The decline in headline inflation was primarily driven by transport costs and food and non-alcoholic beverages, which made the largest downward contributions to the annual inflation rate.

However, measures of underlying inflation suggested that domestic price pressures remain persistent.

Core CPI, which excludes volatile items such as energy, food, alcohol, and tobacco, remained unchanged at 2.6 per cent year-on-year. Within the index, goods inflation slowed from 2.0 per cent to 1.7 per cent, while services inflation edged down marginally from 3.7 per cent to 3.6 per cent.

Similarly, Core CPIH held steady at 2.8 per cent in June. Goods inflation eased to 1.7 per cent from 2.0 per cent, whereas services inflation remained unchanged at 3.6 per cent.

The latest inflation figures indicate that while overall price growth continues to cool, sticky services inflation and stable core readings suggest that underlying inflationary pressures have not yet fully subsided. The data is likely to be closely watched by policymakers as they assess the outlook for interest rates and the broader UK economy.