INFLATION rose back to 2.7 per cent last month, after falling to 2.4 per cent in April, according to the consumer prices index (CPI) data released by the Office for National Statistics (ONS) yesterday.
Transport costs in total jumped by 9.4 per cent, driving the rise. Air fares shot up by 22 per cent last month, after chancellor George Osborne raised Air Passenger Duty in April. Annualised inflation hovered at 2.7 to 2.8 per cent between October last year and April, when it fell before rising again last month.
There was no change in the price of food between April and May this year, after a rise of 0.7 per cent in the previous month. The tax and price index, which adds the effect of tax increases to retail prices, rose by 2.2 per cent over the year. The retail prices index rose by 3.1 per cent in the year to May, up from 2.9 per cent in the year to April. A new measure, known as RPIJ, lifted from 2.3 per cent to 2.5 per cent.
Ernst & Young’s Andrew Goodwin suggested inflation could worsen soon. “Base effects are also likely to ensure that the CPI measure rises further in June, probably to three per cent or higher,” Goodwin said.