According to the ONS, falls in clothing and food prices were the main contributors to the change in the rate along with smaller rises in air fares than a year ago.
There were no large upward effects to offset the change.
CPIH (not a National Statistic) grew by 0.3% in the year to June 2015, down from 0.4% in May 2015.
Maike Currie, associate investment director, Fidelity Personal Investing, commented:
“UK inflation continues to hover around the zero per cent mark with today’s consumer price index falling back to 0% in June with lower clothing prices following the summer sales and falls in food prices the main driving factors. This follows May’s CPI figure of 0.1% and the UK’s brief dip into deflationary territory in April with a fall of 0.1% – a far cry from the Bank of England’s 2% inflation target.
“These numbers come a day ahead of the UK employment figures expected to show average wages are rising. Coupled with low inflation, this means more pounds in people’s pockets and a boost to the UK consumer which should be positive for growth as consumer spending remains the backbone of the UK economy. We have already seen signs of looser purse strings with yesterday’s figures from the British Retail Consortium showing the biggest rise in high street sales in 18 months, as improving incomes encourage consumers to splash out on clothes and big ticket items. This will help stem any concerns that the UK is in danger of slipping into deflationary territory.
“For now prices are expected to stay low given the fall in food costs, as well as the seasonal clothing sales, but we could see prices start to edge up heading into autumn.
“British inflation remains at its lowest levels historically, having fallen significantly in the past year – consider that just a year ago, in June 2014, inflation stood at 1.9%. Low inflation means interest rates will stay lower for even longer. Ultimately, the consumers’ gain is the investors’ pain as a ‘low-growth, low-return’ environment means an extended period of slim pickings for savers and investors. Anyone seeking a decent income will need to look to the stock market for better returns."
