MPC to 'hold fire' as inflation remains unchanged

CPIH, which the ONS uses as its headline measure and which includes owner occupiers’ housing costs, was also unchanged from May at 2.3%.

Steady inflation rates have led to industry speculation that interest rates will remain unchanged until later in the year, or even into 2019.

Tom Stevenson, investment director for personal investing at Fidelity International, said: “June’s unchanged inflation rate is a huge surprise. It had been expected to bounce back up to 2.6% or even 2.7% on the back of higher fuel and energy prices. While these came through, they were offset by falling prices for clothes and games. Inflation remained at 2.4% for the third month in a row.

"Faster rising prices would have given the Bank of England cover for an interest rate hike next month. Now it looks odds-on that the MPC will hold fire yet again. That’s particularly the case after yesterday’s wage growth data emerged weaker than expected at 2.5% including bonuses.

“As well as stagnant real incomes, the Bank of England will be mindful of the deepening economic and political uncertainty as well as the potential for inflation to soften again as petrol price hikes drop out of the comparisons. August’s expected rate hike is, therefore, even less of a dead cert than it was before today’s surprise inflation print. It is now entirely possible that the Bank will delay until November or even next year."

Nancy Curtin, chief investment officer at Close Brothers Asset Management, commented: “Despite strong increases in energy prices, inflation has defied expectations and remained subdued. This should enable the UK to feel some benefit of wage growth in June which will be a relief for consumers."