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The rate of price rises has fallen to 7.9% in June, down from 8.7% in May, according to the latest Consumer Prices Index (CPI) from the Office for National Statistics (ONS).
On a monthly basis, the CPI rose by 0.1% in June 2023, compared with a rise of 0.8% in June 2022.
Alongside this, the CPI including owner occupiers’ housing costs (CPIH) rose by 7.3% in the 12 months to June 2023, down from 7.9% in May.
The ONS stated that falling prices for motor fuel led to the largest downward contribution to the monthly change in CPIH and CPI annual rates.
Furthermore, food prices still rose in June 2023 but by less than in June 2022, leading to an easing in the rates.
There were also no large offsetting upward contributions to the change in the rate.
Core CPI, excluding energy, food, alcohol and tobacco, rose by 6.9% in the 12 months to June 2023, down from 7.1% in May, which was the highest rate since March 1992.
The CPI goods annual rate slowed from 9.7% to 8.5%, while the CPI services annual rate eased from 7.4% to 7.2%.
Grant Fitzner, ONS chief economist, said: “Inflation slowed substantially to its lowest annual rate since March 2022, driven by price drops for motor fuels. Meanwhile, core inflation also fell back after hitting a thirty-year high in May. Food price inflation eased slightly this month, although it remains at very high levels.
“Although costs facing manufacturers remain elevated, especially for construction materials and food items, the pace of growth has fallen across the last year with the overall cost of raw materials falling for the first time since late 2020.”
Helen Dickinson, chief executive of the British Retail Consortium, added: “Efforts by retailers to curb price rises and reduce inflation appear to be paying off as inflation rates for food fell for the third month in a row. Prices for cheese, fruit and fish all dropped as lower commodity costs and cheaper energy prices filtered through to customers.
“There were also drops for many non-food items such as children’s clothing, household textiles, and domestic appliances, boosted by an increase in summer discounting. However, supply chains remain volatile: Russia’s decision to pull out of the Black Sea Grain Initiative could increase costs for some staples in the future.”
