ii comments on inflation data for June 2020

Inflation remains well below target, meaning the Bank of England could launch more stimulus measures.

Commenting on the ONS inflation data for June 2020, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “While June’s increase outstripped expectations, it does not necessarily mean that inflation will continue on the upward trend for the rest of the year. 

“Inflation may have crept up slightly last month, but many Britons have seen a reduction in their cost of living, with large expenses, such as commuting costs and entertainment, slashed following unprecedented Covid-19 lockdown restrictions as many of us become accidental savers.

“As society reopens, it is not a bad time to reassess your spending instead of reverting to all of your pre-coronavirus habits. The lockdown period may have made you realise that you are a more frivolous spender than you think, which could impact your long-term savings goals – although there’s always a balance to be struck and many of us have been missing those cheeky takeaway flat whites!

“The introduction of the computer games component helped drive inflation - although pent up demand when lockdown restrictions were eased for non-essential retailers in mid-June is likely to be another significant contributing factor.

“Inflation remains some way below the UK’s target of 2% - meaning the Bank of England could launch more stimulus measures. A further cut to interest rates is not beyond the realms of possibility, despite the Bank having already made two swathing base rate cuts in March – which would spell yet more bad news for savers who have faced years of paltry returns on their cash.”