Inflation falls in June - but another rise could be around the corner

Inflation went down last month, but the relief for struggling households could be temporary.

According to the Office for National Statistics (ONS), inflation slowed from 2.8% to 2.6% in the year to June.

The drop was partly down to a fall in motor fuel and food prices.

What is inflation?

Inflation is a measure of how fast prices are going up, so if the figure increases, it means your money doesn’t stretch as far as it did before.

A fall, meanwhile, means that although prices are still rising, they're going up at a slower rate, so there's less pressure on your finances.

The ONS measures inflation by tracking the prices of items in an imaginary shopping basket, such as bread, milk, cars and televisions, every month.

So the headline figure shows us how much the total price of what’s in that basket has changed.

Why the situation might soon change

On the face of it, a fall in inflation is good news for hard-pressed people struggling with soaring living costs.

But analysts think the figure will soon start heading the other way, as hostilities between the US and Iran have resumed and pushed up oil prices once again.

Meanwhile, Ofgem’s energy price cap increased by 13% in July, which will also drive up costs for consumers.

This means now could be a good time to see what practical steps you can take to ease the financial pressure in the coming months.

Look at your spending

Take a proper look at your income and outgoings, so you can prioritise your spending and work out where you can make savings.

That should give you more certainty that you can pay important bills when they arrive.

We’ve put together a guide to how to create a budget to help you get started. 

Check our regular money saving tips

We’re always updating these pages with ideas on how you can cut costs, such as: 

• how to save energy
• how to cut your food bill
• 50 ways to cut your fuel costs
• how to keep childcare costs down this summer
• how to make your money go further

You can also find round-ups of standout deals and low-cost recipes that can help you save money in the shops and at home.

Find out what benefits you can claim 

Even if you’re in work, you might be eligible for some financial support to help you with your living costs.

Use our benefits calculator to see what you could claim.

It might be more than you realise.

Ask for help if you’re struggling with debt

If you’re feeling weighed down by debt, contact us for confidential, practical and impartial debt advice.