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Inflation steady as cheaper fuel offset by dearer food and alcohol

The Office for National Statistics said the Consumer Prices Index (CPI) was 2% in June.

Food and booze alcohol increased in June 2019 (Jon Super/PA)
Food and booze alcohol increased in June 2019 (Jon Super/PA)

UK inflation was subdued in June, as rising food and alcohol prices were offset by cheaper petrol and diesel.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) was 2%, the same as the previous month.

The rate was in line with economists’ expectations and spot on the Bank of England’s 2% target.

Mike Hardie, head of inflation at the ONS, said: “The overall rate of inflation remains steady, with no change in pace this month.

“Petrol and diesel prices fell this year but rose a year ago, while clothes prices dropped by less than this time last year.”

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(PA Graphics)

In June, the price of food increased 1.5% compared with 0.8% growth in May, driven by the rising cost of fruit and vegetables.

The amount shoppers paid for vegetables in June was 5.3% higher than the same period last year following poor weather in spring and the start of summer.

Fruit prices also jumped up by 2.2% against the same month last year, after the price of blueberries and raspberries surged.

Wine and beer also had a positive contribution, with the price of beer continuing to accelerate in June, reporting 2.1% growth, up from 1.1% growth in May.

These price rises were partly offset by lower motor fuels, as petrol prices fell by 0.1p per litre month on month, compared with a 2.7p month-on-month price rise in June 2018.

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(PA Graphics)

Diesel prices also improved, falling by 1.5p per litre in June against last year, to an average of 134.3p per litre.

The cost of clothes also had an upward effect on overall inflation, despite men’s and women’s clothing prices declining over the month.

Despite clothing prices falling 1% in June due to seasonal sales, this was an improvement on the 2.1% fall from heavy price cuts in June 2018.

Elsewhere, furniture prices also moved upwards, rising 0.9% in June as household cleaning products saw significant price rises.

The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 1.9% in June, the same as in May.

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