UK inflation held steady in June as price rises across the county stayed at the Bank of England’s target level for the second month running, according to official figures. The number remained unchanged at 2 per cent.
It means prices in June rose at the same rate as in May, data from the Office for National Statistics showed. The figure is higher than expected, economists had forecast a slight fall to 1.9 per cent. It follows nearly three years of above-target inflation with households squeezed by soaring food and energy prices.
ONS chief executive Grant Fitzner said: “The inflation rate was unchanged in June. Hotel prices rose strongly, while second-hand car costs fell but by less than this time last year. However, these were offset by falling clothing prices, with widespread sales driving down their cost.
“Meanwhile, the cost of both raw materials and goods leaving factories fell on the month, though factory gate prices remain above where they were a year ago.” Price rises in areas such as services, which include restaurant and hairdresser prices, were persistent, causing concern among some that there is still stubbornly high inflation which needs to be tackled.
It means more for Bank of England policy-makers to ponder when they next meet to decide whether to change the base rate of interest. The base rate - which is used to help set mortgage rates and other borrowing costs - currently stands at a 16-year-high of 5.25 per cent after it was increased in a bid to tackle high inflation which contributed to the cost-of-living crisis.
An interest rate cut would be good news for mortgage holders and people paying back other forms of debt like loans or credit card bills.
