Inflation across the United Kingdom (U.K.) fell more than expected in June to 7.9%, its lowest level in more than a year.
However, despite the June decline, the U.K. continues to struggle with one of the highest levels of inflation in the developed world. By contrast, Canada’s June inflation rate came in at an annualized 2.8%.
Economists surveyed by the Reuters News Agency had expected June inflation of 8.2% year-over-year in the U.K., down from May's reading of 8.7%.
Inflation across the U.K. peaked at a 41-year high of 11.1% in October 2022. The current rate of inflation remains far above the Bank of England’s 2% annualized target.
Traders are now pricing in a quarter-percentage point (25-basis points) rise in interest rates when the British central bank holds its next policy meeting on August 3.
Core inflation, which excludes volatile food, energy, alcohol and tobacco prices, and which the Bank of England pays particular attention to, declined to 6.9% in June from May's rate of 7.1%.
