The annual inflation rate in the UK eased to 2.6% in June 2026 from 2.8% in May, slowing more than the expected fall to 2.7%. This marked the lowest reading since March 2025, driven by moderating transport inflation (5.7% vs. 6.8% in May), with the largest downward contribution coming from motor fuels, particularly diesel. The average price of diesel fell by 10.7 pence per litre between May and June, reaching 176.4 pence per litre, while petrol prices declined by 2.1 pence to 155.3 pence per litre. Food inflation also cooled to 1.7%, the lowest since August 2024, from 2.2%, with the largest drag coming from sugar, jam, syrups, chocolate, and confectionery. Inflation also eased for alcohol and tobacco (2.1% vs. 2.4%), while prices declined for clothing and footwear (-0.5% vs. 0.2%) and furniture and household goods (-0.2% vs. -0.1%). On a monthly basis, consumer prices rose 0.1%, in line with forecasts, following a 0.2% increase in May.