UK inflation slows sharply to 7.9% in June

economictimes.indiatimes.com:

inflation fell by more than expected in June and was its slowest in more than a year at 7.9%, according to official data that will ease some of the pressure on the Bank of England to keep on raising interest rates sharply.Sterling fell as the Office for National Statistics said the consumer price inflation growth rate was its lowest since March of last year but remained above the pace of price growth in many other big, rich economies. Economists polled by Reuters had forecast that the CPI rate in the 12 months to June would drop to 8.2% from May's 8.7%, moving further away from October's 41-year high of 11.1% but still far above the BoE's 2% target.

The BoE said in May it expected inflation in June would fall to 7.9%. Core inflation — a measure which excludes food, energy, alcohol and tobacco prices and which the BoE watches closely to gauge underlying price pressures — also dropped by more than expected, coming in at 6.9% from May's 7.1%, its joint highest in more than 30 years.

Economists polled by Reuters had expected the core measure of price growth to hold at 7.1%. Food price inflation slowed to 17.3% — still a major strain on the finances of many households — from 18.3% in May.

The BoE is expected to raise interest rates for a 14th time in a row on Aug. 3, having already increased its base rate to 5% in May from 0.1% in December 2021.

Prime Minister Rishi Sunak earlier this year promised to halve inflation by the end of 2023 before a national election expected in 2024, a target that finance minister Jeremy Hunt has described as challenging. The opposition Labour Party, which is riding high in opinion polls, has accused Sunak's Conservative Party of presiding over a «mortgage catastrophe» as home-owners see their