The Office for National Statistics (ONS) has revealed that the Consumer Price Index (CPI) has dropped to 7.9% in the 12 months to June 2023, down from 8.7% in May, and down from a recent peak of 11.1% in October 2022.

On a monthly basis, CPI rose by 0.1% in June 2023 compared with a rise of 0.8% in June 2022.

The CPI including owner occupiers’ housing costs (CPIH) rose to 7.3% compared to 7.9% in May.

According to ONS data, falling prices for motor fuel led to the largest downward contribution to the monthly change in CPIH and CPI annual rates.

Food prices rose in June 2023 but by less than in June 2022, also leading to an easing in the rates.

Industry experts react to latest ONS inflation and HPI figures

This section will be updated throughout the day — check regularly for more comments from industry experts

4pm

Stuart Crispe, founder of Sunny Avenue:

“Given all the rate rises we have had over the past year, downward pressure on house prices was inevitable.

“Even after the better than expected inflation data, it needs to drop further and the base rate to stabilise or come down before the property market once again starts to rebound.

“We could see a rise in BTL investors leaving the market, as well as those who cannot afford to keep their homes, putting them up for sale.

“Though the lack of supply will likely prevent a collapse in prices, more BTL properties coming onto the market in particular will put further downward pressure on prices.”

3pm

Tomer Aboody, director at MT Finance:

“Although property prices still managed to rise slightly over the past year, these figures illustrate the reduction in buyer confidence.

“As the market gets to grips with constant negativity in terms of rising interest rates and high inflation, we will see a slowdown in property transactions.

“Something needs to change in order to inject some fuel into the market, as sales volumes are nearly half what they were this time last year.

“The property market is the backbone of the UK economy and can’t be allowed to grind to a complete halt.”

2pm

Giles Coghlan, chief market analyst at HYCM:

“Today’s modest decline to 7.9% may signal to investors that economic pressures are gradually easing.

“However, core inflation continues to be a thorn in the central bank’s side at 6.9%, highlighting the risk that domestic inflationary pressures are here to stay for now.

“The implications of this inflation reading go beyond just numbers on a chart.

“The persistence and increasing severity of UK inflation could amplify worries about the country’s economic health on the world’s stage, potentially leading to a decline in the GBP’s value.”

1pm

Mark Harris, CEO at SPF Private Clients:

“Finally, inflation is not only moving in the right direction but has picked up some pace.

“It seems as though all eyes are on the latest inflation figures to determine what happens next and whether recent market volatility has settled.

“There is a strong argument for the BoE to pause interest rate rises for now, giving the market time to settle down and adjust.

“Consecutive base rate rises have been painful; it’s time to let them take effect, rather than causing continued anxiety and distress for borrowers.”

Andrew Gething, MD at MorganAsh:

“Following successive shocks, it’s positive to see inflation ease beyond expectations to its lowest level in more than a year.

“The hope is this news may allow mortgage lenders to reduce rates and budge even slightly on their fixed-rate pricing.

“But beyond the lower headline inflation achieving the BoE’s [inflation] forecast, we cannot escape the fact that it remains well above its overall target of 2%.”

12pm

Neil Rudge, head of enterprise at Shawbrook:

“Let’s hope this is the beginning of the end for high inflation.

“It’s challenging for business owners to forecast and plan effectively when prices are rising rapidly and the uncertainty can make it difficult to set prices, manage budgets, and make long-term investment decisions, which are critical for sustainable business growth.”

Paul McGerrigan, CEO at Loan.co.uk:  

“The inflation rate has again not conformed to expectations, dropping further than predicted.

“Downward momentum of this magnitude is highly positive, and this is the metric No.10 uses to measure its target of halving inflation by the end of 2023.

“Strip out the more volatile food, alcohol, tobacco and energy prices however, and we see that core inflation is more stubborn, having moved only 0.2%.

“Add in household cost and we see that the CPIH has unsurprisingly barely moved, reducing by 0.1% to 6.4%.

“These figures may divide the Monetary Policy Committee (MPC) when they meet next month, however it’s likely rate rises will continue.

“Some economists now believe rates will peak at 5.5% and remain stubbornly high until Q3 2024 before any noticeable drop; borrowers need expert support now more than ever.”