{"id":1104968,"date":"2026-07-22T17:33:36","date_gmt":"2026-07-22T17:33:36","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1104968\/"},"modified":"2026-07-22T17:33:36","modified_gmt":"2026-07-22T17:33:36","slug":"new-uk-pm-burnham-gets-early-boost-as-inflation-dips","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1104968\/","title":{"rendered":"New UK PM Burnham gets early boost as inflation dips"},"content":{"rendered":"

<\/a> UK Prime Minister Andy Burnham has pledged to ease cost-of-living pressures, unveiling a tax cut on electricity prices and a \u00a32 cap on single bus fares (Toby Melville) <\/p>\n

Britain’s annual inflation rate fell more than expected in June, driven by lower fuel prices, in a boost to new Prime Minister Andy Burnham as he touted his plans to ease the cost of living on Wednesday.\u00a0 <\/p>\n

“The public’s priority is reducing cost of living pressures and that’s what I’m doing,” he told reporters in the southwestern city of Bath. <\/p>\n

“I’m taking a difficult look at some of the things that the government was committed to … and reprioritising,” Burnham added. <\/p>\n

The Consumer Prices Index rose by 2.6 percent in the 12 months to June, down from 2.8 percent in May, the Office for National Statistics said in a statement. <\/p>\n

Analysts’ consensus forecast had been for a slowdown to 2.7 percent last month. <\/p>\n

Much of the fall was a result of petrol and diesel prices easing as crude prices tumbled in the wake of a ceasefire between the United States and Iran. <\/p>\n

However, analysts expect the inflation dip to be short-lived as fresh fighting in the Middle East this month led to the collapse of a preliminary peace deal, pushing oil prices back up. \u00a0 <\/p>\n

Burnham, who became prime minister on Monday, unveiled a tax cut on household electricity prices on Tuesday and a \u00a32 ($2.70) cap on single bus fares on Wednesday in his first days in the job. <\/p>\n

“Falling inflation is news families want to hear but there is much more to do to give\u00a0people\u00a0the breathing space\u00a0they\u00a0need,” said newly-appointed finance minister John Healey.\u00a0 <\/p>\n

“We have chosen to focus on the cost of living in our first week, signalling that concern for working people will be at the heart of everything we do,” he added. <\/p>\n

– ‘Higher inflation coming’ – <\/p>\n

Burnham announced that value-added tax (VAT) would be taken off electricity bills from October in a policy costing the Labour government about \u00a3850 million in the current UK financial year. <\/p>\n

The measure’s start date coincides with an expected rise in the UK energy regulator’s price cap on electricity and gas bills, a consequence of the ongoing US-Iran war that will likely spur inflation. <\/p>\n

“Higher inflation is still coming,” said Paul Dales, chief UK economist at Capital Economics.\u00a0 <\/p>\n

“The lagged effect from high energy prices will probably lift inflation above 3.0 percent in September and to about 3.5 percent early next year,” he said. <\/p>\n

Higher inflation meanwhile risks hikes to UK interest rates, analysts said. <\/p>\n

The new PM has said he wishes to ease pressure also on small businesses, hit by the previous Labour administration’s tax hikes. <\/p>\n

At the same time, Burnham has pledged to respect the strict fiscal discipline seen under his predecessor Keir Starmer, whereby the government balances tax receipts with day-to-day state spending. <\/p>\n

“This week, the three policies that I’ve announced — ending rough sleeping, the bus cap we’re announcing today and the removal of VAT off electricity bills — are all fully funded,” he vowed on Wednesday. <\/p>\n

Official data Tuesday showed UK government borrowing dropped more than expected in June, handing a boost to Healey, who replaced Rachel Reeves as chancellor of the exchequer. <\/p>\n

“While the general trend in the data is encouraging … the latest flare up in US-Iran tensions and the spike in oil prices means that it is unlikely to last, regardless of the cost-of-living measures deployed by the Burnham administration,” said Matthew Ryan, head of market strategy at Ebury. <\/p>\n

Burnham’s long-term goal is a “reindustrialisation” of Britain and mass building of municipal housing. <\/p>\n

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