Government · UK · Office for National Statistics
UK inflation eases to 2.6%, services stay sticky at 3.6%
UK consumer price inflation eased to 2.6% in the year to June 2026, its lowest since December 2024, as falling petrol and diesel prices pulled transport costs down. Services inflation, the number the Bank of England watches most closely, held firm at 3.6%.
Source published Summarised
Key findings at a glance
- 2.6% CPI rose 2.6% in the 12 months to June 2026, its lowest annual rate since December 2024
- 2.8% CPIH, the ONS lead measure including owner occupier housing costs, eased from 3.0% in May
- 3.6% Services inflation held firm, more than double the goods rate and the stickiest part of the basket
- 1.7% Goods inflation slowed from 2.0% the previous month as product cost pressure eased
- 5.7% Transport inflation fell from 6.8%, the single biggest downward pull on the headline rate
- 21.3% Motor fuel prices were still 21.3% higher than a year earlier, down from a 24.6% annual rise in May
- 4.4% Restaurants and hotels was the fastest-rising division, up from 4.2% in May
- -0.5% Clothing and footwear prices fell over the year, the clearest deflation in the basket
- 0.1% CPI rose just 0.1% on the month in June, a near-flat monthly reading
What the report covers
The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to June 2026, down from 2.8% in May and the lowest annual rate since December 2024. The broader CPIH measure, which the ONS treats as its lead indicator because it includes owner occupiers' housing costs, eased to 2.8% from 3.0%. Both fell mainly because transport prices, and petrol and diesel in particular, rose far less quickly than a year ago.
Underneath the headline, the split that matters for pricing is still there. Goods inflation slowed to 1.7%, while services inflation held at 3.6%, more than double the goods rate. Food and non-alcoholic drink inflation eased to 1.7% from 2.2%, giving grocery and hospitality buyers a little breathing room, but restaurants and hotels remained the fastest-rising division at 4.4%. Read alongside our latest UK labour market report, the picture is a consumer whose real pay is inching up while price pressure cools unevenly across the basket.
What this means for UK marketers
For UK marketers, a headline rate drifting towards target is good news for demand, but the detail is where the planning happens. Inflation at 2.6% does not mean prices are falling. It means they are still rising, just more slowly, so the squeeze on discretionary budgets that built up over the past two years has not reversed. Households have simply stopped getting worse off as quickly.
The goods-versus-services gap is the single most useful line in this release. Goods inflation at 1.7% means the cost pressure behind physical products is easing, which gives retailers and ecommerce brands room to hold or trim prices to defend volume rather than pass on rises. Services inflation stuck at 3.6% tells the opposite story: labour-heavy categories such as hospitality, leisure, personal care and subscriptions are still getting more expensive, and consumers know it. If you sell a service, expect more price scrutiny and more comparison behaviour, and lead with value and outcomes rather than discounting by reflex.
The fall in fuel costs matters for anyone with a delivery or field-service model. Cheaper diesel eases logistics costs and can support free-shipping thresholds or faster fulfilment as a differentiator. On the demand side, watch the categories: restaurants and hotels at 4.4% and communication at 5.2% are where consumers feel inflation most, so messaging that acknowledges value will land harder there than blanket sale language.
None of this changes the core discipline. With the Bank of England's 2% inflation target still below the current services rate, rate cuts are likely to stay gradual, so cheap money is not coming back quickly. That keeps the pressure on marketing efficiency. This is a market that rewards digital marketing that protects margin, measured on profit contribution rather than raw volume, and it pays to track spending in near-real time: our summary of UK card spending indicators is a faster read on how households are actually behaving between these monthly prints.
How they got the data
The Consumer Prices Index and CPIH track the changing cost of a representative basket of goods and services bought by UK households. Prices are collected each month from retailers across the UK, online and in store, and combined with administrative and scanner data. From the February 2026 index the ONS began using supermarket scanner data for around half of the grocery market, roughly 300 million price points drawn from over a billion units sold each month, replacing a sample of about 25,000 manually collected grocery prices. The remaining half of groceries, and most other categories, are still collected manually.
The annual rate compares the price level in June 2026 with June 2025; the monthly rate compares June with May 2026. CPIH is the ONS lead measure because it includes owner occupiers' housing costs, which CPI excludes. For the concept and international context, see the Consumer Price Index. Full tables and the underlying dataset are available from the ONS source below.
Government · UK
Read the full report
From Office for National Statistics · published 22/07/2026