The newest inflation figures present the worth of on a regular basis prices is continuous to surge. Overall inflation for the 12 months to June dropped from 8.7 p.c to 7.9 p.c whereas core inflation is down from a document 7.1 p.c to six.9 p.c.

Core inflation is the measure of the rise within the worth of products and providers with out accounting for vitality payments and meals.

Giles Coghlan, chief market analyst for HYCM, stated: “Core inflation continues to be a thorn in the central bank’s side at 6.9 percent, 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. As stagflation fears loom larger, the GBP may face downwards pressure from that quarter too.

“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.”

Lily Megson, coverage director at My Pension Expert, warned excessive costs will proceed to pile stress on Britons’ budgets, notably for the retired.

She stated: “Today’s figures have confirmed what many already assumed - inflation continues to plague Britons’ finances and will continue to do so for some time. 

“And for those approaching or in retirement, it adds a further layer of uncertainty as they consider how they can make their hard saved pension fight to hold its value.

“Remaining calm is vital. So, too is seeking the support from guidance, or using advice for personalised recommendations.”

She spoke in regards to the totally different choices pension savers have, saying: “From annuities to flexible access drawdowns, there are various options available to provide the right levels of security and risk which will suit individual needs - and under the current climate, the Government would be wise to point savers in the direction of both types of support to ensure they don’t inflict financial self-harm. 

“After all, in the wake of its latest drive to improve pension outcomes, this could be a logical next step.”

The newest figures imply inflation has eased by greater than anticipated to its lowest stage for 15 months.

Many economists have been anticipating the general determine to drop to eight.2 p.c reasonably than all the way down to 7.9 p.c.

The ONS has stated falling gasoline costs are the largest driver behind the drop, whereas meals worth inflation has additionally dropped to 17.3 p.c from 18.7 p.c in May.

ONS chief economist, Grant, Fitzner stated: "Inflation slowed substantially to its lowest annual rate since March 2022, driven by price drops for motor fuels. Meanwhile, core inflation also fell back after hitting a 30-year high in May.

"Food worth inflation eased barely this month, though it stays at very excessive ranges. Although prices going through producers stay elevated, particularly for development supplies and meals objects, the tempo of progress has fallen throughout the final 12 months, with the general price of uncooked supplies falling for the primary time since late 2020."

Becky O’Connor, director of Public Affairs at PensionBee, warned Britons they nonetheless face tough months forward as the price of residing stays excessive.

She stated: “The heat of high inflation is beginning to cool a little, giving hope to households that the worst could be over for both price and interest rate rises. 

“But for anyone who is hanging on by their fingernails, this decline in prices may be cold comfort. Many households, especially those facing high prices and punishing borrowing costs, still face months of difficulty. 

“If prices continue to come down but rates remain high, the worst of the economic pain will be transferred from the general population dealing with high prices in the shops, to mortgage borrowers grappling with monthly repayments.”