Core inflation remains too high in the UK.
(…) Data from the Office for National Statistics Tuesday showed that annual inflation fell to 3.4% last month from 3.7% in April. (…) The BOE targets inflation at 2%.
Prices rose 0.2% in May on a monthly basis, (…) below April’s 0.6% gain. (…)
Downward pressure on the headline rate was broad-based in May, but the greatest cooling impact came from food and nonalcoholic drinks, in particular meat and food, an ONS statistician said.
Another large downward contribution was from transport, chiefly due to smaller gains in fuels and lubricants prices than a year ago, even as petrol rose to 120.5 pence ($1.78) per liter—the highest level since records began in 1996.
Alcoholic-drinks prices also fell in May, contrasting with increases due to excise duty rises last year, as did recreation and culture prices, including package holidays.
One significant upward impact came from housing and household services, especially electricity bills. (…)
Annual core inflation—which excludes volatile energy, food, alcohol and tobacco prices—fell to 2.9% in May from 3.1% in April, Tuesday’s ONS data showed, matching economist forecasts. Core monthly inflation was 0.3%, down from 0.4% in April.
Retail price inflation—an alternative measure traditionally used as a gauge for pay settlements—dropped to 5.1% on the year in May, from 5.3% in April and matching analyst expectations. Within that, housing costs rose 3.5% on the year, marking the strongest rate since May 2008. In monthly terms, retail prices grew 0.4%, compared with a 1% gain in April and again matching forecasts.
Related posts:
- U.K. Consumer-Price Inflation Worries
- UK INFLATION ACCELERATES
- Eurozone Inflation Slows in May
- U.S. Inflation at 44-Year Low
- EURO16 MARCH INFLATION 1.4%; EURO27 1.9%
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