The Consumer Prices Index rate of inflation remained at the Bank of England’s 2 per cent target in the 12 months to June 2019, the Office for National Statistics (ONS) has revealed.

Aegon pensions director, Steven Cameron commented: “For the second month in a row, the inflation rate is spot on the Bank of England’s target of 2 per cent. The figure follows labour market statistics which show wages have outpaced inflation for 16 months in a row and real wage growth rose at the fastest rate since October 2015 to 1.7 per cent in May this year.

“Although the economy continues to be subdued, the low inflationary environment will be welcomed by households, particularly if wage growth continues to exceed price increases. This will be particularly welcome during the holiday period, although the continued weakness in sterling will offset this for those travelling abroad.

“If we continue to see prices rising slower than wages then consumers should be in a position where they can start to put any increase in disposable income into a savings pot. It is always tempting to spend any additional income however even an initial increase in saving as little as £30 could mean you have an additional £50k in your savings pot over 40 years.”

Furthermore, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) was 1.9 per cent in June 2019, also unchanged from May 2019.

The ONS said the largest downward contributions to change in the 12-month rate between May and June 2019 came from motor fuels, accommodation services and electricity, gas and other fuels, with prices in each category falling between May and June 2019 compared with price rises between the same two months a year ago.

The largest offsetting upward contributions to change came from clothing and food.

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