UK Inflation Falls Again During June

The underlying rate of UK inflation fell to 2.8% in June, down by 0.1% on the previous month, according to the latest figures from the Office Of National Statistics (ONS).

The headline rate of inflation, which includes mortgage interest payments, fell by 0.2% to 2.9% during June, but remained above the Government’s target of 2.5%.

ONS has attributed the declining rate of inflation to the falling cost of foreign holidays, particularly those booked in advance to European destinations. There was also a large downward effect from a fall in housing costs. The main upward influence came from the rising cost of car insurance.

The falls give extra justification to the Bank of England’s recent decision to cut interest rates a 48-year low of 3.5%.

The all items Retail Prices Index for June 2003 was 181.3.

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