United Kingdom Inflation May 2022

United Kingdom

United Kingdom: Inflation comes in at highest level since our records began in May

June 22, 2022

Consumer prices increased 0.65% from the previous month in May, which was below April's 2.51% increase. May's result marked the weakest reading since January. That said, the monthly inflation reading was still extremely elevated by historical standards.

Inflation inched up to 9.1% in May, above April’s 9.0%, with higher price rises for food, housing and utilities, and transport driving the uptick. May's reading marked the highest inflation rate since our current records began. Meanwhile, the trend pointed up, with annual average inflation coming in at 5.2% in May (April: 4.6%). Finally, core inflation fell to 5.9% in May, from April’s 6.2%.

Inflation is expected to stay well above the Bank of England’s 2.0% target in the coming quarters, due to higher energy and food prices, the weak pound, the rise in VAT from April and Brexit-related trade frictions. Moreover, Ofgem is likely to increase the energy price cap substantially from 1 October, while the government’s recent GBP 21 billion cost of living package could further stoke price pressures.

FocusEconomics Consensus Forecast panelists expect inflation to average 7.5% in 2022, which is up 0.4 percentage points from last month’s forecast, and 3.9% in 2023.


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