UK inflation dropped by more than expected in June to 2.6%, primarily driven by drop in food prices.
The ONS says food and non-alcohol drink prices rose by 1.7% in June, down from an annual rate of 2.2% in the May. On a monthly basis, it slipped 0.2%.
The biggest falls were in sugar, gams, syrups, chocolate and confectionery.
There are also some drops in the price of oils and fats (particularly margarine and other vegetable oils), meat (particularly beef), dairy, and vegetables.
Commenting on the figures, James Walton, Chief Economist at IGD, states, “Although food inflation has fallen to its lowest level since mid-2024, prices are still rising, just at a slower pace.
"This easing appears to reflect favourable food commodity markets at the start of this year, with grains in good supply and prices under control, helping to offset higher costs elsewhere.
"For the many UK households under financial pressure, the slowdown will be welcome. However, we are not out of the woods yet when it comes to food inflation. Although the situation appears to be under control for now, we expect inflation to rise again later this year as costs start to filter through the supply chain.
"Key factors include the conflict in the Middle East pushing up global energy prices, government regulation adding costs to business, and extreme weather across Europe this summer.
"Therefore, food and drink businesses will need to continue building resilience and capacity across the supply chain to help deliver more predictable and stable food pricing for shoppers in future.”
Harvir Dhillon, an economist at the British Retail Consortium, an industry body, said the fall in food prices drop had also been enabled by strong competition between supermarkets.
"Food inflation had a particularly notable drop, its lowest in almost two years, with prices falling on the month," Dhillon said.
"This was driven largely by intense competition between supermarkets, trying to entice their customers during a warm spell of weather, despite supply chain pressures."
Dr Liliana Danila, chief economist at The Food and Drink Federation (FDF), adds: "We continue to anticipate rising food price inflation as the year goes on, however this is likely to be lower, come later and plateau for longer than the previous inflationary cycle.
"With disruption the new norm for the food system, it’s critical that the new prime minister takes food security seriously and is ready to work in partnership with industry to ensure our food system is investing for growth and resilience, from vital tech adoption to future-facing skills."