UK inflation falls to 2.6 percent in June as fuel prices ease

Britain's annual inflation rate fell more than expected in June, helped by lower fuel prices, official data showed Wednesday. The Office for National Statistics said the Consumer Prices Index rose by 2.6 percent in the 12 months to June, compared with 2.8 percent in May. Analysts had expected inflation to slow to 2.7 percent.

The fall was largely linked to lower petrol and diesel prices after crude prices dropped following a ceasefire between the United States and Iran. Analysts cited in the report said the dip may not last, because renewed fighting in the Middle East this month led to the collapse of a preliminary peace deal and pushed oil prices higher again.

The data came early in Andy Burnham's term as prime minister. Burnham, who became prime minister on Monday, has promised to reduce cost-of-living pressure and announced an energy tax cut on his first full day in office.

New finance minister John Healey said falling inflation was welcome for families, but said more action was needed to give people financial relief. He said the government had chosen to focus on the cost of living in its first week.

Keir Starmer resigned as prime minister and Labour Party leader last month after months of internal pressure following scandals, economic difficulties and policy reversals.

Paul Dales, chief UK economist at Capital Economics, warned that inflation was still expected to rise. He said delayed effects from high energy prices would probably push inflation above 3.0 percent in September and to about 3.5 percent early next year.