UK June CPI 2.6%: Core, Services Inflation Stay Hotter Than Expected

UK headline inflation eased to 2.6% in the year to June, just below the 2.7% consensus forecast, the Office for National Statistics reported. Core inflation, which strips out energy, food, alcohol and tobacco, rose 0.3% on the month. That was above the 0.2% estimate.

On the month, food prices fell 0.2% and transport costs dropped 0.3%. Increases in restaurants and hotels, up 1.0%, and recreation and culture, up 0.5%, offset those declines.

Services inflation, a key measure for the Bank of England, eased only to 3.6% from 3.7% in May. Economists had expected a fall to around 3.5%.

The BOE's next policy decision is scheduled for August 1. The services inflation reading came in above the 3.5% estimate. The pound's reaction to the data can be tracked on the GBP/USD profile.