Inflation remained at 2 per cent in June
The figure means workers are still benefitting from real wage gains as earnings grew by 3.6 per cent per year in the last quarter.
The ONS said the largest downward contributions to the 12-month rate between May and June 2019 came from motor fuels, accommodation services and electricity, gas and other fuels, with prices in each category falling between May and June 2019. The largest offsetting upward contributions came from clothing and food.
Mike Hardie, head of inflation at the ONS, said: “The overall rate of inflation remains steady, with no change in pace this month. Petrol and diesel prices fell this year but rose a year ago, while clothes prices dropped by less than this time last year.”
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate stood at 1.9 per cent in June 2019, unchanged from May 2019.
Anthony Morrow, CEO and co-founder of OpenMoney said: “Inflation continues to be the dog that hasn’t barked. At 2 per cent, it remains very muted, despite the unprecedented fall in the value of sterling since the vote to leave the EU, which in normal times should have led to higher import prices.
“But we live in a world turned upside down. Even with the pound testing new lows this week as the prospect of a no-deal Brexit increases, nobody is seriously suggesting that policymakers raise interest rates to support the currency – as they would have done in the past. Instead, the next move in the cost of borrowing is likely to be down, further easing inflationary pressures.
“In the meantime, savers need to think outside the box in seeking better returns on their money if they want to beat rock-bottom rates.”
Kevin Roberts, director at Legal and General Mortgage Club, said: “While political uncertainty may be affecting house price growth, the mortgage market has remained resilient. A rise in the number of high loan-to-value products, as well as increasingly competitive rates on fixed-rate mortgages, is acting as an incentive for those looking to move onto – and up – the property ladder.”