PwC comments on ONS CPI data - July 2026

Commenting on the latest Office of National Statistics Consumer Price Index June 2026 data, Adam Deasy, Economist at PwC UK, says:

“After two months of downward surprises, another monthly fall in CPI inflation to 2.6% shows price pressures have remained relatively subdued compared to the Bank of England’s expectations a few months ago.

”This is more likely to be a temporary dip than the start of a sustained move back to target. July’s Energy price cap update will push up household energy bills, while renewed geopolitical pressures could lift the peak later this year. The pass-through from volatile energy prices into food, goods and wider business costs has also not yet been fully felt.

“But the downward pressures may continue: further discounting could keep food and goods prices lower, a sluggish labour market would constrain wage growth and mechanical cuts to inflation from policy (such as the recently announced VAT cut on electricity bills) may all put downward pressure on inflation through the second half of the year.

“Another lower-than-expected reading in June buys the Bank of England time. Inflation is still heading higher in the near term; the question is whether this softer underlying price momentum will continue, and keep that rise contained.”