UK CPI Drops to 2.6% in June 2026 Falling Below Bank of England Forecast
The ONS reported UK headline CPI at 2.6% year-on-year in June 2026, down from 2.8% in May and below the Bank of England's own projection of inflation running 'a little under 3%' in Q3 2026. The deceleration was driven primarily by the steepest monthly diesel price fall on record and the lowest food inflation since August 2024, while services inflation eased only marginally to 3.6%. Market pricing following the release pointed toward a rate hold at the July 30 MPC meeting, with a first cut considered more likely at September, as the Committee awaits further evidence that services inflation is durably declining.