UK inflation unexpectedly drops in June

What caused it to drop

The rate of inflation unexpectedly fell from 2.9 per cent in May to 2.6 per cent in June official figures show.

It is the first fall in the rate since October 2016 and has been caused by the lower oil prices.

Fuel prices fell for the fourth successive month down 1.1 per cent in May and June 2017 compared to a 2.2 per cent rise in the same period last year.

A decline in prices for recreational and cultural goods such as toys and computers games also contributed to the decline 

The figures from the Office of National Statistics will provide some welcome respite to households, as it will ease the squeeze on the cost of living, although prices are still rising faster than wages.

It is also suggested that the fall could ease the pressure on the Bank of England to raise interest rates to combat rising prices.