UK inflation falls to 2% target

Consumer prices rose by 2.0% in the 12 months to May, down from 2.3% in April, according to the latest data.

It means that inflation has reached the Bank of England’s target for the first time in nearly three years.

Prices are still rising, but at the slowest pace since July 2021. The consumer prices index (CPI) peaked at 11.1% in October 2022, the highest level since 1981.

The biggest downward contribution to May’s inflation figure came from falling food prices, while upward pressure came from a slight rise in the cost of petrol and diesel, the Office for National Statistics (ONS) said.

Core inflation, which excludes volatile elements such as energy and food, fell to 3.5% in May from 3.9% in April.

However, services inflation remained high, dipping slightly to 5.7% in May from 5.9% in April.

Analysts believe there could be a further delay to the anticipated cut in interest rates from the Bank of England, with expectations now moving towards a reduction in September rather than August.