Inflation falls to lowest level in almost three years

Inflation has hit the Bank of England’s target for the first time in almost three years.

Prices rose at 2% in the year to May, down from 2.3% the month before, official figures show.

The economy is a key talking point in the run-up to the general election on 4 July, with all of the main parties debating how they would keep the cost of living under control.

It comes ahead of a Bank of England decision on UK interest rates this Thursday.

The bank is expected to hold the rate at 5.25% – the highest for 16 years – for the seventh meeting in a row, with markets not betting on a cut until August. Wage growth is still higher than the Bank sees as ideal – and there are concerns inflation will tick up again later this year.

The drop in May’s figure was driven by a slowdown in price rises for food and soft drinks, recreation and culture, and furniture and household goods. However, petrol prices went up sharply.

Insights

More Related Articles

How Doctors Can Use Insurance to Manage Health and Property Risk

Scaling Strategies: Preparing Regional Banks for Tomorrow’s Challenges

Future-Proofing Finance: A Regional Bank’s Guide to Sustainable Growth

Inactive