United Kingdom Inflation May 2020

United Kingdom

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.

FocusEconomics Consensus Forecast panelists expect inflation to average 0.9% in 2020, down 0.2 percentage points from last month’s forecast, and 1.5% in 2021.


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United Kingdom Inflation Chart

United Kingdom Inflation May 20 20 1

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

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