"The lagged transmission of higher crude oil prices, an uptick in cotton prices and electricity tariffs, the hardening of inflation for manufactured products as well as an unfavourable base effect, led to the sharp pickup in the WPI inflation to a 54 month high in June 2018", said Aditi Nayar, Principal Economist at ICRA, as reported by MoneyControl.
The latest inflation figures come just 24 hours after the ONS showed United Kingdom employment hitting its highest level ever and wages continuing to rise steadily.
Following the announcement, sterling dipped 0.54% against the USA dollar to $1.3045, its lowest level in ten months.
"The pairing hit a low of €1.120 as bets that the Bank of England (BoE) will hike interest rates fell 10 per cent".
"However, gas and electricity and petrol prices all rose, with consumers seeing the highest price at the pump for almost four years, with inflation remaining steady overall", he added.
The reading was below market expectations for a rise to 2.6%. The rate was expected to remain unchanged.
BoE Governor Mark Carney said at the start of the month that both the economy as a whole and pay were growing as the central bank had forecast in May, smoothing the way for an August rate rise.
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There was also a drop in the prices of games, toys and hobbies, particularly in the cost of computer games. Investors cut the probability of an August rate rise to 73 percent from 84 percent on Tuesday.
The ONS's preferred measure of inflation which includes housing costs, CPIH, also remained steady, at an annual rate of 2.3 per cent.
Factories, however, have chosen to absorb much of the pressure rather than pass it on to consumers with output prices rising 3.1 percent on the year.
Prices rose by three per cent in the first quarter of 2018 - the lowest increase since August 2013.
Either way, after the vote for Brexit in 2016, Britain's economic growth slowed down due to high inflation and uncertainty for business.
The last time CPI was higher was in February, when inflation was 2.7 per cent.
Prices usually fall between May and June as summer sales get under way, but the 2.3% drop this year compares with a 1.1% fall a year ago, and is the largest decline during the same period since 2012.
House prices also increased the slowest in five years according to the ONS, with flat prices staying the same for a year.