UK inflation at a one-year low

Inflation in the UK remained at a one-year low in May, leaving open the possibility of a raise in the interest rate from the Bank of England.

In May 2018 consumer price inflation was at 2.4%, the joint lowest annual rate since March 2017, according to the National Office for Statistics. A Reuters poll of economists had predicted a rate of 2.5%.

In November 2017 inflation reached a five-year high of 3.1%, as the drop in the value of the pound following the EU referendum led to a fall in consumer spending and slower growth in the British economy.

Rises in oil prices and energy bills are expected to produce further increases in the inflation rate in the coming months, followed by a tailing off towards the target rate of 2%.

Economists said there was nothing to indicate an urgent need to raise interest rates, following a November rise – the first since 2008.