The UK’s inflation rate fell to 2.6% in June, driven by lower fuel and food prices, while Uganda recorded negative inflation of -2.6% due to a good harvest and falling food costs, according to official reports.
UK Inflation Slows to 2.6% on Lower Fuel and Food Prices
The UK’s inflation rate dropped to 2.6% in the year to June, as falling fuel and food prices eased upward pressure on costs, the Office for National Statistics (ONS) reported. The decline followed a 2.8% rate in May, with motor fuel prices—particularly diesel—playing a key role in the slowdown, according to ONS chief economist Grant Fitzner.
Food prices also fell, driven by cheaper goods such as chocolate, beef, and margarine, while clothing prices declined due to summer sales. Food and non-alcoholic beverage prices fell by 0.2% month-to-month, with sugar, chocolate and confectionery seeing the largest drop in price. Meat and vegetable prices rose in June but the increase was smaller than the same time last year. Prices of oils, fats and dairy fell in June, compared to a year previously. The ONS noted that food inflation often lags by up to 13 months, meaning potential impacts from the war in Iran could still emerge. Fuel prices at the pump fell in June after the US and Iran agreed to halt military operations and allow the key Strait of Hormuz to re-open. But the recent resumption of hostilities and a new jump in crude oil prices means inflation could spike again in the coming months.
“A fall in motor fuel prices, particularly diesel, helped ease inflation in June.”
Grant Fitzner, ONS chief economist
Uganda Experiences Negative Inflation as Harvest Drives Food Price Drops
Uganda recorded a negative inflation rate of -2.6% in June, the 10th consecutive month of negative inflation, as a good harvest pushed food prices lower, according to the country’s statistics bureau (UBOS). This [negative inflation] is still due to lower price levels of staple foods, new clothing materials and household fuel,
UBOS stated.
For more on this story, see UK Inflation Drops to 2.6% in June.
Economic growth in Uganda remained strong, with the economy expanding by 5.6% over the past year, and the local currency stable. Mukund Rao, managing director of Uganda’s Crane Bank in Kampala, attributed the deflation to increased production of food commodities like bananas and a deflation in the commodities market.
The annual underlying inflation rate, excluding food, fell to 0.1%, with prices of new clothing and household fuel also declining. The cost of alcoholic beverages, water, health and education charges rose slightly. Food makes up 45.2% of the index which has now recorded 10 consecutive months of negative inflation. In May, the inflation rate was minus 2.4%.
Diverging Trends: UK’s Caution vs. Uganda’s Deflation Dynamics
The UK and Uganda illustrate contrasting inflation narratives. While the UK’s slowdown reflects temporary relief from energy and food price pressures, Uganda’s negative inflation stems from agricultural abundance and sustained economic growth. However, both highlight the complex interplay between global events and local economic conditions.
In the UK, the ONS warned that inflation could rebound if crude oil prices rise further, citing recent tensions in the Middle East. There is continued growth of the economy in the past year at 5.6%, and the currency has also remained stable,
Rao said, underscoring the country’s economic stability despite falling prices.
What Comes Next for Inflation in Both Regions?
The UK faces uncertainty as geopolitical tensions and energy market fluctuations could reverse the recent inflation slowdown. Both economies will be closely watched for signs of broader economic shifts.
For consumers, the immediate impact is mixed: lower fuel and food costs in the UK provide some relief, while Ugandans benefit from cheaper essentials.
