By Sandra Kenneth
Britain’s annual inflation rate fell more sharply than anticipated in June, driven primarily by lower fuel prices and delivering a timely boost to newly installed Prime Minister Andy Burnham.
Data released Wednesday by the Office for National Statistics (ONS) revealed that the Consumer Prices Index (CPI) rose 2.6 percent in the 12 months to June, down from 2.8 percent in May. The figure beat analysts’ forecasts, which had broadly anticipated a more modest slowdown to 2.7 percent.
The ONS attributed much of the decline to falling petrol and diesel prices, which eased after global crude oil prices tumbled following a temporary ceasefire between the United States and Iran.
The encouraging figures arrive during a transitional moment for the government. Burnham, who assumed office on Monday following Keir Starmer’s resignation last month amid months of political friction and economic missteps, has placed the cost-of-living crisis at the top of his agenda. On his first full day as prime minister, Burnham announced an immediate energy tax cut.
“Falling inflation is news families want to hear, but there is much more to do to give people the breathing space they need,” said newly appointed Chancellor of the Exchequer John Healey. “We have chosen to focus on the cost of living in our first week, signalling that concern for working people will be at the heart of everything we do.”
Despite the positive headline figures, economists warn that the relief may prove temporary. A recent resurgence in Middle East conflict has disrupted the preliminary peace deal, sending crude oil prices back up.
Paul Dales, chief UK economist at Capital Economics, cautioned that inflationary pressures remain on the horizon.
“Higher inflation is still coming,” Dales noted, predicting that the delayed impact of rising energy costs could push inflation back above 3.0 percent by September, reaching approximately 3.5 percent early next year.
