Commenting on the latest ONS inflation data, Kevin Brown, savings expert at financial mutual Scottish Friendly, says:
“A dip in inflation in June creates a striking disconnect between months of alarming headlines (1) about the Middle East and an official rate that has nevertheless continued to move lower.
“People shouldn’t be complacent. Today’s figure is arguably backward-looking and may not fully reflect yet the higher energy costs households will begin to face following July’s energy price-cap change (2).
“The Bank of England may now decide it can hold its base rate next week rather than raise it, however policymakers are likely to remain wary of next month’s inflation reading which could present a far less comfortable picture (3).
“Lower inflation still means prices are rising, not falling, so UK households could consider continually reviewing savings returns, energy costs and everyday spending. For those with a suitable cash buffer and a long-term horizon, investing through an ISA could also form part of a plan to strengthen future financial resilience.”
(1) Source: https://www.thetimes.com/world/middle-east/article/oil-gas-prices-gulf-strait-hormuz-iran-war-bv0vqk9cs
(3) Source: https://global.morningstar.com/en-gb/economy/what-expect-junes-uk-inflation-data