United Kingdom: Inflation falls to lowest level since June 2016 in May
June 17, 2020
Consumer prices were flat in May over the previous month, contrasting the 0.2% fall recorded in April. Looking at the details of the release, recreation and culture, transport and health prices fell in May. Meanwhile, prices for restaurants and hotels grew at a more subdued pace compared to the prior month.
Inflation dropped to 0.5% in May, moderately below April’s 0.8%. May's reading marked the lowest inflation rate since June 2016. Annual average inflation edged down to 1.5% in May (April: 1.6%). Core inflation fell to 1.2% from April’s 1.4%.
Inflation is seen remaining well below the Bank of England’s 2.0% target this year on weak activity and low fuel prices. Weak inflation boosts the possibility of additional easing from the Bank of England at the meeting ending 18 June.