Overview
- Official figures published on Wednesday showed UK CPI slowed to 2.6% in June and Canada’s annual inflation eased to 2.8%, with both moves driven mainly by month‑on‑month falls in petrol and diesel prices.
- Statistics Canada reported gasoline fell more than 10% month‑on‑month and that excluding gasoline Canada’s CPI was unchanged at 2.2%, while Canada’s core measures (CPI‑median 1.9%, CPI‑trim 1.8%) softened further.
- The ONS said lower motor fuel and food prices were the biggest downward pulls on UK inflation in June, but diesel and pump prices remain well above year‑ago levels after spring spikes from the Iran conflict.
- Analysts warned the June dip is likely short‑lived because renewed Middle East hostilities have already pushed wholesale oil and pump prices higher and the UK energy price cap rose in July, which will feed into future CPI readings.
- The data reduce near‑term pressure on central banks but leave them cautious, markets expect the Bank of England to hold rates around 3.75% with possible hikes later in 2026, and governments are rolling out targeted cost‑of‑living relief such as VAT cuts on electricity and bus fare caps.