Stress testing the UK: As inflation eases, will we feel the benefits at home?

[00:00:00]We have the latest inflation data and to help us understand what it means, I'm going to use Sky News' economic pressure tracker, a really helpful tool to help us get behind the headlines. And here is today's headline CPI inflation, consumer price inflation. It fell in June down to 2.6%.

[00:00:19]That's down from 2.8% the previous month, a welcome decline. Well, what was driving it? The Office for National Statistics say transport costs, by which they mean fuel prices. And I can show you here petrol prices, what's been going on. This is the number to July, but remember we're looking at June, it's backward-looking data.

[00:00:35]It was on the decline. It was starting to fall after the rises caused by the attacks on Iran. If we look at diesel prices, it's even more extreme. Diesel crucial to getting goods and services round the country. It was falling in June and that helped drag prices down.

[00:00:52]There was another factor, food inflation was on the decline, too. Prices not rising so fast. This data from the British Retail Consortium tells us that 2.43% in June. Prices not rising so fast.

[00:01:05]Let's go back to the fuel question. We can look at what is behind those fuel prices by looking at this economic this energy commodity data and crude oil is the really important thing here. Look at what happened after those attacks on Iran by the US and Israel. Up go oil prices, up above $120 a barrel, really crippling for the global economy. They got the right side of $80, but they're now on the way back up above 90. That is a warning for the global economy. It's caused by the uncertainty in the Gulf and particularly the Strait of Hormuz.

[00:01:34]You can actually have a look at what is going on in the Strait of Hormuz in some detail thanks to our tracker. This is daily transits, the number of ships passing in each direction. When the war began, well, the Strait was effectively closed. That was squeeze off 20% of the world's energy. Now, there has been some increase in traffic since that nascent peace deal between Iran and the US. We can actually show you what that means day by day. We can count the ships in and out. 26 heading in, 35 out. Even more helpful if we want to understand that oil price, what kind of ships are they? What are they carrying? And we see gas carriers here, gas prices, liquid gas, that makes a a big difference to energy prices here. But crude oil is the thing we're interested in. This is the week-on-week change. See there's been a big decline in the last week. If we can get crude oil tankers passing at pre-war levels, that oil price might come down.

[00:02:24]And that will tell us something about the path of inflation. Crucially, for many people, what happens to interest rates. We can use this tracker to show you that. Here's where we are from the Bank of England.

[00:02:35]Rates were going down, down, down. The war began, they've been on hold.

[00:02:37]Expectations are they'll stay there at the bank's next meeting. Uh but come the autumn, if this picture continues, we might be looking at a rate rise. We are to stay on top of that and so much else in the global economy with our economic pressure tracker. Find it on our app, find it on our website. Help understand the numbers that really matter.