Inflation has held steady at the Bank of England’s 2% target, according to new figures from the Office for National Statistics (ONS).
Measured by the Consumer Prices Index (CPI), which rose by 2% in the 12 months to June 2024, the same rate as the 12 months to May 2024, it means prices in June increased at the same rate as May.
The largest upward contribution came from restaurants and hotels, where prices of hotels rose more than a year ago; the largest downward contribution came from clothing and footwear, with prices of garments falling this year having risen a year ago.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, rose by 3.5% in the 12 months to June 2024, the same rate as in May.
Martin Sartorius, Principal Economist, CBI, said: “The fact that inflation is stable at the Bank of England’s target will be welcome news for many households as we start to see things return to normal after period of high price growth. However, it’s worth noting that many have yet to feel the benefit of lower inflation due to the high level of prices, particularly for food and energy bills.
“Today’s data paves the way for an interest rate cut next month, which would begin to provide some relief for firms and households that are struggling with high borrowing costs.
“Going forward, the Bank’s Monetary Policy Committee will be mindful of potential upside risks to inflation in the near-term as the domestic growth outlook improves. They are also likely to move carefully as they assess the impact of the first rate cut in four years.”
