British inflation hits 14-month low

The UK consumer price inflation rate slowed to 2.6% in June 2026, the lowest level in 14 months, due to a 3.1% drop in fuel prices and a decrease in inflation for food and beverage prices. However, inflation is expected to rise again to over 3% in September 2026 due to higher energy prices, and is projected to reach around 3.5% in early 2027, driven by an increase in the energy utility price cap. Conversely, the government announced a reduction in VAT on utility services, which is expected to offset inflation by about 0.2 percentage points over the next 12 months.

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