United Kingdom Inflation May 2017

United Kingdom

United Kingdom: Inflation continues to rise unabated in May

June 13, 2017

Consumer prices ikn the UK rose 0.3% in May compared to the prior month, down from April’s 0.5% rise. May’s uptick was driven by higher prices for furniture, household equipment and maintenance, housing, water, electricity, gas and other fuels and clothing and footwear.

Inflation increased from 2.7% in April to 2.9% in May, the highest rate since April 2012 and overshooting analysts’ expectations, while annual average inflation increased from 1.3% in April to 1.5% in May. As a result, inflation veered further away from the Bank of England’s 2.0% target. The weaker sterling is driving price rises, as demand-pull inflationary pressures remain subdued despite record-low unemployment, with real wage growth having petered out in recent months.

The Bank of England sees inflation reaching 2.8% in Q4 2017 and 2.4% in Q4 2018. FocusEconomics Consensus Forecast panelists expect inflation to average 2.6% in 2017 and 2.5% in 2018.

Author:, Economist

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United Kingdom Inflation Chart

United Kingdom Inflation May 2017

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.

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