UK Retail Inflation Report summary
July 2023
Period covered: Period covered: June 2023
3 minute read
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Inflation
Headline inflation showed signs of easing in June, falling to 00% YoY from 00% last month. This marks the first time in several months that inflation has come in below expectations.
Core inflation, excluding food and energy prices, also fell back, declining to 00% from 00% in May also beating expectations with economists forecasting it to remain unchanged at 00%.
Both goods and services annual inflation rates slowed to 00% and 00% respectively, with the latter falling back ahead of estimates of staying at 00%.
The slowdown in inflation was mainly attributed to price drops in motor fuels which recorded a double-digit YoY decline.
Notably, food price inflation moderated, with the largest downward contribution coming from milk, cheese and eggs. However, food prices remain elevated for households rising by just over 00% YoY, weighing on budgets.
Encouragingly, the overall cost of raw materials declined for the first time since late 2020 with input producer price inflation falling by 00% YoY.
Factory gate inflation also slipped back, rising by just 00% YoY in June, suggesting supply chain pressures are easing and will have a downward impact on inflation in the months ahead.
Markets responded to the better-than-expected data, indicating a reduced likelihood of aggressive interest rate rises by the Bank of England.
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Inflation eases but remains high
Source: ONS
