UK inflation unexpectedly flatlined in May, as a slowdown in food price rises offset pressure from airfares, according to official figures. This occurred despite concerns that the Iran war effect would begin to impact the economy.
Official Data
The Office for National Statistics (ONS) reported that the Consumer Prices Index (CPI) inflation was recorded at 2.8% in May, unchanged from April. This was lower than economists' forecasts, who had predicted an increase to 3%.
Offsetting Factors
ONS chief economist Grant Fitzner explained: “After last month’s slowdown, inflation held steady in May as various price movements offset each other. The main upward movement came from transport with airfares, vehicle taxes and petrol prices all pushing up inflation. These were offset by lower food prices, with decreases in inflation seen across a range of meat, dairy and vegetable items compared to last month, as well as the cost of domestic heating oil, which fell back after climbing in recent months.”
Analysts noted that while fuel costs rose, food inflation slowed, helping to keep overall inflation stable. The data suggests that the Iran conflict has not yet significantly affected UK consumer prices.
