UK inflation steady at 4.5 per cent in May

UK consumer price inflation remained stable at 4.5 per cent in May, new data has shown, as the prices of air fares fell from highs seen over the Easter period.

The rate remains at a two-and-a-half year high, though core inflation fell to 3.3 per cent from 3.7 per cent in April.

The CPI rate was in line with expectations but remains at more than double the official Bank of England target level of two per cent.

Economists warned that the fall was due to temporary changes and inflation was not expected to fall further.

“The upward and downward pressures on monthly inflation tend to be very volatile and don’t alter the broader picture that inflation will remain elevated throughout this year,” said Nida Ali, economic advisor to the Ernst & Young ITEM Club.

“With utility companies intending to increase prices of heating and energy, we are likely to see inflation rising further over the coming months.”