Inflation cools to 5.7% in June, raising hopes worst is over

The rate of inflation slowed in June to 5.7% after rising for two months in a row, according to the statistics agency CBS.

Provisional figures show that food prices continued to be much higher than a year ago, rising by 12.6%, but the rate came down from the 12.8% in May.

A year ago inflation was just below 9%, before rising rapidly to peak at 14.5% in September. Analysts said the latest figures were further evidence that inflation was cooling long-term.

The price of industrial goods was up by 7.3% from last year, compared to 8.9% in May, while the cost of energy – including petrol and diesel – fell by 16.3%, slightly less than the 18.5% drop last month.

It is the first time the CBS has published figures using a new calculation method, designed to reflect price rises more accurately.

The previous method measured energy prices according to the cost of new contracts, even though most households were on fixed-term contracts where the rate is unchanged from month to month.

The Russian invasion of Ukraine triggered a spike in wholesale gas and electricity prices that prompted energy providers to raise their domestic rates considerably and stop offering fixed-term contracts, distorting the official figures.