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.

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