UK inflation falls more than expected to 7.9% in June

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UK inflation eased more than expected to 7.9 per cent in June, providing some relief for the Bank of England ahead of its decision on interest rates next month.

Annual inflation was down from 8.7 per cent in May, the Office for National Statistics said on Wednesday. It was lower than the 8.2 per cent forecast by economists polled by Reuters, ending a four-month period of price growth exceeding forecasts.

It was also in line with the 7.9 per cent forecast by the Bank of England in May.

Core inflation, which strips out volatile food, energy, alcohol and tobacco prices, also declined to 6.9 per cent from a 31-year high of 7.1 per cent in the previous month. Analysts expected it to be unchanged.

Services inflation eased to 7.2 per cent from a 31-year high of 7.4 per cent in May.

Both core and services inflation are closely watched by policymakers to monitor underlying and domestic price pressures and to decide on interest rates.