LONDON — Inflation suffered a shock fall in June, pulling back from its post-Brexit high, according to the latest data released on Tuesday.
The Office for National Statistics said in its latest release that the UK’s Consumer Prices Index (CPI) inflation rate — the key measure of inflation — was 2.6% in June, down from 2.9% in May.
CPI measures the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care.
CPIH, a measure which includes costs associated with maintaining a home — and which the ONS cites as a more useful indicator of living costs than CPI — was also at 2.6%, although it fell from just 2.7% in the previous month.
“Falling prices for motor fuels and certain recreational and cultural goods and services were the main contributors to the fall in the rate,” the ONS said.
“These downward contributions were partially offset by rising prices for furniture and furnishings.”
The chart below illustrates the sharp rise in inflation following last year’s Brexit vote. OOH represents owner occupiers’ housing costs, which measures the cost of owning, maintaining, and living in one’s own home.
The sharp fall in the value of the pound following the UK’s vote to leave the EU last year has raised the cost of imports and pushed up the rate of inflation. Inflation is expected to peak at more than 3% at some point in 2017, but the lower cost of fuel, triggered by a broader fall in global oil prices, helped subdue the number in June.
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