Inflation in the UK slowed to its lowest level in more than a year thanks to a drop in fuel and food prices, giving households a temporary breather that may not last long amid renewed geopolitical tensions in the Middle East, which are pushing energy prices higher.

Consumer prices rose 2.6% in the 12 months through June, down from a 2.8% increase the previous month, the lowest rate since March 2025, according to the Office for National Statistics on Wednesday.

The reading came below the average economist expectation of 2.7%, marking the third consecutive month that price growth has come in below estimates.

Petrol and diesel costs fell 3.1% last month, after crude oil prices declined amid hopes for an end to the war between the United States and Iran.

Additional downward pressure came from a slowdown in food inflation to its lowest level since 2024, along with steep discounts on clothing prices.

Services inflation, a key indicator of domestic pressures closely watched by the Bank of England, slowed to 3.6% from 3.7%, though it came in slightly above expectations.