Inflation holds steady in June despite rise in hotel prices

Inflation remained steady at 2% in June despite a strong rise in hotel prices during the month, according to the latest figures from the Office for National Statistics (ONS). It comes as prices for restaurants and hotels rose by 0.9% between May and June this year, compared with a lower monthly rise of 0.5% a year ago. The rise in the annual rate was almost entirely because of the price of hotels, which saw a monthly rise of 8.8%, a higher rate than the 1.7% a year earlier. This rise was partially offset by the price of restaurants and cafes which saw a monthly rise of 0.3%, lower than the 0.5% rise a year earlier. Inflation for the month remained steady in part due to clothing and footwear increasing by 1.6% in the year to June 2024, compared with a rise of 3.0% in the year to May. On a monthly basis, prices fell by 1.2% this year, compared with a 0.2% rise a year ago. The fall in the annual rate was the result of downward effects from garments for women, garments for children, footwear for women, and garments for men. Prices in all of these categories apart from garments for children saw price falls in June 2024 coupled with a rise in the monthly price in June 2023. Monthly prices for garments for children fell in June 2024 at a greater rate than the fall in June 2023. The ONS said that three items making “particularly strong downward contributions” were women’s sportswear shorts, women’s exercise leggings and girl’s fashion tops. These items saw strong double digit monthly growth in June 2023 compared to price falls in June 2024. Meanwhile, prices of food and non-alcoholic beverages rose by 1.5% in the year to June 2024, down from 1.7% in the year to May. The June figure is the lowest annual rate since October 2021. ONS chief economist Grant Fitzner said: “The inflation rate was unchanged in June. Hotel prices rose strongly while second-hand car costs fell but by less than this time last year. However, these were offset by falling clothing prices, with widespread sales driving down their cost. “Meanwhile, the cost of both raw materials and goods leaving factories fell on the month, though factory gate prices remain above where they were a year ago.”