Inflation drops to 7.9%

Based on the Office for National Statistics’ (ONS) latest, this is down from a recent peak of 11.1% in October 2022 – the highest annual inflation rate since 1981 – with the June rate being the lowest since March 2022. The easing seen between May and June was the result of prices rising by 0.1% on the month compared with a rise of 0.8% a year earlier.  

Consumer Prices Index including owner occupiers’ housing costs (CPIH), meanwhile, rose by 7.3% in the 12 months to June 2023 – down from 7.9% in May. Additionally, CPIH was down from a recent peak of 9.6% in October – the highest rate in more than 40 years – with the June rate also the lowest since March 2022.

The main drivers of the annual inflation rate for CPIH and CPI include changes in the price of fuel, as well as the downward effects from food and non-alcoholic beverages, furniture and household goods, and restaurants and hotels.