Food prices have fallen – but inflation expected to rise from here
UK inflation fell to 2.6% in June, driven by lower food and fuel prices, though analysts warn this relief may be short-lived. Rising energy costs and geopolitical tensions are expected to push inflation back up in the coming months.
Why it matters
Economic volatility and fluctuating energy prices continue to impact the cost of living, complicating the government's fiscal outlook.
Image source, iStock / Getty Images Plus Image caption, The ONS said food products such as chocolate and beef were falling in price
Food prices are rising at their slowest rate in nearly two years, as the cost of staples such as margarine and sugar has gone down.
Supermarket price wars have helped drive down prices in the year to June, the industry says, as retailers work to tempt customers with summer deals.
Inflation in the UK overall has fallen to 2.6% in the year to June, down from 2.8% in the year to May, according to the Office for National Statistics (ONS), driven largely by lower fuel and food prices.
June's figure will be welcomed by new Prime Minister Andy Burnham and his government, but analysts warn the fall is temporary, as higher energy prices in July are expected to push inflation back up.
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