Falling fuel, milk, cheese and eggs prices have helped a surprise drop in inflation, while sugar, jam and syrups have pushed to keep costs high, according to the latest figures.
Economists had predicted the CPI would only fall to 8.2%, but falling petrol and diesel costs, and a slowing down in food price rises, led to a larger-than-expected drop.
Sky News looks at what is behind the figures – and what is keeping prices high.
Transport
The easing in the annual rate for transport was almost entirely because of changes in the price of motor fuels.
The cost of fuel fell by 22.7% in the year to June 2023, compared to a fall of 12.1% in May.
Average petrol and diesel prices stood at 143.0 and 145.7 pence per litre respectively in June 2023, compared with 184.0 and 192.4 pence per litre in June 2022.
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Food
The rate of food inflation has fallen to 17.3% in June, down from 18.3% in May.
The largest reason for this drop came from milk, cheese and eggs prices, with the annual rate easing to 22.8% from 27.4% in May.
There were other, smaller downward effects from meat (mostly from pork products), and bread and cereals.
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‘We aim to halve inflation’
Inflation for these products has been high – and often a driver of price rises – because of the increased costs of production for dairy farmers. The costs of cattle, animal feed and farm labour have all risen in the past year, although this has eased in the last month, helping push inflation down.
But two small, partially offsetting upward effects came from sugar, jam, syrups, chocolate, and confectionery (particularly chocolate), and mineral waters, soft drinks, and juices.
This is in part because India, the world’s second-largest producer of sugar, is cutting export after rains hurt the sugar cane crop and the country diverts more sweeteners to biofuel.
Raw materials and factories
Also falling was the cost of raw materials – they dropped 2.7% in price – the first time they’ve actually become cheaper since late 2020, the ONS said.
The price of goods leaving factories grew 0.1%, down from a rise of 2.7%.
Prices have been rising since the later pandemic years as supply chain problems and difficulty sourcing goods pushed costs up. The war in Ukraine and the ensuing energy crisis saw gas bills at record highs which pushed up costs across the economy. But as wholesale oil and gas prices ease, this has had a knock-on effect on inflation.
Furniture and household goods
The falling cost of raw materials has also seen this category down to 6.6% from 7.5% in May – the lowest recorded rate since November 2021.
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Superintendent Jen Appleford, from Avon and Somerset Police, said the community was in shock and Aria’s family were being supported by police.
“It is impossible to adequately describe how traumatic the past 36 hours have been for them and we’d like to reiterate in the strongest possible terms their request for privacy,” she said.
Supt Appleford said police were working with local schools and other agencies to make sure support is available.
The Duke of Marlborough, formerly known as Jamie Blandford, has been charged with intentional strangulation.
Charles James Spencer-Churchill, a relative of Sir Winston Churchill and Diana, Princess of Wales, is accused of three offences between November 2022 and May 2024, Thames Valley Police said.
The 70-year-old has been summonsed to appear at Oxford Magistrates’ Court on Thursday, following his arrest in May last year.
The three charges of non-fatal intentional strangulation are alleged to have taken place in Woodstock, Oxfordshire, against the same person.
Spencer-Churchill, known to his family as Jamie, is the 12th Duke of Marlborough and a member of one of Britain’s most aristocratic families.
He is well known to have battled with drug addiction in the past.
Spencer-Churchill inherited his dukedom in 2014, following the death of his father, the 11th Duke of Marlborough.
Prior to this, the twice-married Spencer-Churchill was the Marquess of Blandford, and also known as Jamie Blandford.
His ancestral family home is Sir Winston’s birthplace, the 300-year-old Blenheim Palace in Woodstock.
But the duke does not own the 18th century baroque palace – and has no role in the running of the residence and vast estate.
The palace is a Unesco World Heritage Site and a popular visitor attraction with parklands designed by “Capability” Brown.
In 1994, the late duke brought legal action to ensure his son and heir would not be able to take control of the family seat.
Blenheim is owned and managed by the Blenheim Palace Heritage Foundation.
A spokesperson for the foundation said: “Blenheim Palace Heritage Foundation is aware legal proceedings have been brought against the Duke of Marlborough.
“The foundation is unable to comment on the charges, which relate to the duke’s personal conduct and private life, and which are subject to live, criminal proceedings.
“The foundation is not owned or managed by the Duke of Marlborough, but by independent entities run by boards of trustees.”
The King hosted a reception at Blenheim Palace for European leaders in July last year, and the Queen, then the Duchess of Cornwall, joined Spencer-Churchill for the reveal of a bust of Sir Winston in the Blenheim grounds in 2015.
The palace was also the scene of the theft of a £4.75m golden toilet in 2019 after thieves smashed their way into the palace during a heist.
The duke’s representatives have been approached for comment.
We’re estimated to consume 8.2kg each every year, a good chunk of it at Christmas, but the cost of that everyday luxury habit has been rising fast.
Whitakers have been making chocolate in Skipton in North Yorkshire for 135 years, but they have never experienced price pressures as extreme as those in the last five.
“We buy liquid chocolate and since 2023, the price of our chocolate has doubled,” explains William Whitaker, the real-life Willy Wonka and the fourth generation of the family to run the business.
Image: William Whitaker, managing director of the company
“It could have been worse. If we hadn’t been contracted [with a supplier], it would have trebled.
“That represents a £5,000 per-tonne increase, and we use a thousand tonnes a year. And we only sell £12-£13m of product, so it’s a massive effect.”
Whitakers makes 10 million pieces of chocolate a week in a factory on the much-expanded site of the original bakery where the business began.
Automated production lines snake through the site moulding, cutting, cooling, coating and wrapping a relentless procession of fondants, cremes, crisps and pure chocolate products for customers, including own-brand retail, supermarkets, and the catering trade.
Steepest inflation in the business
All of them have faced price increases as Whitakers has grappled with some of the steepest inflation in the food business.
Cocoa prices have soared in the last two years, largely because of a succession of poor cocoa harvests in West Africa, where Ghana and the Ivory Coast produce around two-thirds of global supply.
A combination of drought and crop disease cut global output by around 14% last year, pushing consumer prices in the other direction, with chocolate inflation passing 17% in the UK in October.
Skimpflation and shrinkflation
Some major brands have responded by cutting the chocolate content of products – “skimpflation” – or charging more for less – “shrinkflation”.
Household-name brands including Penguin and Club have cut the cocoa and milk solid content so far they can no longer be classified as chocolate, and are marketed instead as “chocolate-flavour”.
Whitakers have stuck to their recipes and product sizes, choosing to pass price increases on to customers while adapting products to the new market conditions.
“Not only are major brands putting up prices over 20%, sometimes 40%, they’ve also reduced the size of their pieces and sometimes the ingredients,” says William Whitaker.
“We haven’t done any of that. We knew that long-term, the market will fall again, and that happier days will return.
“We’ve introduced new products where we’ve used chocolate as a coating rather than a solid chocolate because the centre, which is sugar-based, is cheaper than the chocolate.
“We’ve got a big product range of fondant creams, and others like gingers and Brazil nuts, where we’re using that chocolate as a coating.”
Image: The costs are adding up
A deluge of price rises
Brazil nuts have enjoyed their own spike in price, more than doubling to £15,000 a tonne at one stage.
On top of commodity prices determined by markets beyond their control, Whitakers face the same inflationary pressures as other UK businesses.
“We’ve had the minimum wage increasing every year, we had the national insurance rise last year, and sort of hidden a little bit in this budget is a business rate increase.
“This is a small business, we turn over £12m, but our rates will go up nearly £100,000 next year before any other costs.
“If you add up all the cocoa and all the other cost increases in 2024 and 2025, it’s nearly £3m of cost increases we’ve had to bear. Some of that is returning to a little normality. It does test the relevance of what you do.”