UK CPI inflation slowed to 2.6% YoY in June from 2.8% in May, while prices rose 0.1% MoM. Core CPI held steady at 2.6% YoY, leaving the underlying inflation rate unchanged despite a softer headline reading.

• The moderation was led by transport and food. Transport inflation eased to 5.7% YoY from 6.8%, driven by lower motor fuel prices, while food inflation slowed to 1.7% YoY from 2.2%, the lowest since August 2024.
• Goods inflation eased to 1.7% YoY from 2.0%, services inflation slipped to 3.6% YoY from 3.7%, and clothing prices moved into deflation at -0.5% YoY as summer discounting intensified. Monthly food prices also declined -0.2%.
• The report showed broader easing in headline inflation as falling fuel costs and softer food prices outweighed pockets of strength elsewhere. Core inflation was unchanged, indicating that underlying price pressures remained steady even as headline CPI moved lower.