But Stuart Morrison, research manager at the British Chambers of Commerce, said that firms are still feeling the pinch when it comes to the cost of doing business.

He said: “While businesses will welcome news that CPI cooled to 2.6 per cent in June, the inflation thermometer remains vulnerable to further spikes in the months ahead.   

“Today’s data shows the pace of inflation eased largely due to a dip in fuel prices. But geopolitical tensions suggest that could be short lived.   

“Our latest survey shows inflation is the top concern for business, cited by 66 per cent of firms.  

“The cost of doing business remains stubbornly high, with firms continuing to face high employment costs and energy bills that are squeezing margins and limiting investment.  

“As the dust settles from political change in Downing Street the new Prime Minister must act quickly to ease the cost of doing business. We stand ready to work in partnership with the new government to drive forward trade, investment and productivity.  

“However, unless businesses are given ‘breathing space’ from mounting cost pressures, economic growth will remain on shaky ground."