The month-to-month studying of 49.4 was a considerable drop from 60 in May. Any rating under 50 signifies value reductions, whereas a rating above means costs rose.
It marked the primary time since February 2020 that costs have been diminished month-on-month.
The fall in costs got here as six sectors reported having decrease manufacturing prices through the month, the very best studying in three years, Lloyds stated.
It signifies that value inflation has began to ease and producers reported seeing enhancements of their provide chains.
Nevertheless, three sectors: family merchandise, industrial items, metals and mining producers; didn’t decrease costs regardless of seeing their prices come down in June.
Furthermore, the evaluation revealed that there was an increase in companies reporting elevating their costs as a result of demand from shoppers was robust in June.
This was notably the case throughout the companies sector, which includes retailers and supermarkets, eating places and pubs, and journey companies.
The report comes as main UK supermarkets have confirmed value reductions in current weeks.
Tesco stated it reduce the costs of greater than 500 family necessities final month, with key merchandise like fruit and greens, rice and tuna, pasta and milk all seeing value drops.
Sainsbury’s additionally unveiled £15 million of value cuts throughout cabinet staples final month as supermarkets come underneath stress to cross on decrease prices to shoppers.
Nevertheless, inflation remained at 8.7% in May, the identical degree because the earlier month, with food and drinks value rises staying within the excessive double-digits.
Lloyds stated there’s prone to be a lag between producers’ costs coming down and shoppers paying much less at grocery store tills.
Annabel Finlay, a managing director in Lloyds’ industrial banking arm, stated: “In what are volatile conditions, there’s no guarantee that manufacturers’ input costs will keep falling.
“There are many variables that affect the shelf price shoppers see – including the input price pressures faced by businesses in other parts of the supply chain.”
Lloyds added that value reductions might be “cancelled out” by the robust ranges of shopper demand which is placing stress on costs.
Nikesh Sawjani, a senior economist for the financial institution, stated: “This will be a factor that will pose serious consideration for the Bank of England as it continues to deliberate over how much further interest rates need to go in the UK”.
