Commenting on today’s data from the Office of National Statistics, that showed the annual rate of CPI inflation falling to 7.9% in June from 8.7% in May 2023, with core inflation falling from 7.1% to 6.9%, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“This very welcome fall in the headline rate of inflation is predominantly driven by petrol prices that fell in June, plus food prices not rising as fast as they did a year ago. We’re also seeing less price pressure in the sale of manufactured goods.

“However, core inflation has only eased slightly. The Bank of England will also be concerned that inflation in the services sector is proving relatively persistent.

“The main story today is that inflation is lower than expected, fuelling a narrative that we are through the worst. The Bank of England will hope that this will cause business leaders and others to lower their expectations of future inflation, which could then become self-fulfilling.”