The rate of the UK’s price rises has fallen from 8.7 per cent to 7.9 per cent in the year up to June, according to the latest official figures.
The consumer price index measure of inflation showed a higher-than-expected fall – offering some relief to families struggling with the cost of living crisis.
While prices are still rising, the Office for National Statistics said the rate of increase had “slowed substantially” to its lowest annual level since March 2022.
The drop will also come as some relief to Rishi Sunak’s government and the Bank of England – with City forecasts predicting a decline to only 8.2 per cent.
While core inflation has fallen back after hitting a 30-year high in May, it is still well above the Bank’s official 2 per cent target – with further interest rate hikes expected in the months ahead in a bid to tame price rises.
Energy security secretary Grant Shapps said inflation remained “far too high” but that it was “moving in the right direction”.
Speaking to Times Radio, the cabinet minister said: “It is good to see the inflation figures coming down as much as that”, before claiming the government’s cost of living support was “starting to pay dividends”.
The ONS’ chief economist Grant Fitzner said the fall had been driven by price drops for motor fuels, while food inflation had eased only slightly.
Inflation at the supermarket pared back to 17.3 per cent from 18.7 per cent in May, though remains painfully high for hard-pressed shoppers. “Food price inflation eased slightly this month, although it remains at very high levels,” said Mr Fitzner.
He added: “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.”
More follows…