United Kingdom: Inflation hits over two-year high in May
Consumer prices increased a seasonally-adjusted 0.59% in May over the previous month, coming in below April’s 0.64% rise. The result was driven by moderating price pressures for transportation and housing and utilities.
Inflation came in at 2.1% in May, up from April’s 1.5% and slightly above the Bank of England’s 2.0% target. May’s reading represented the highest inflation rate since April 2019, and came in above market expectations. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 0.8% in May (April: 0.7%). Core inflation rose to 2.0% in May, from April’s 1.3%.
Rising inflation in recent months has been driven by rebounding demand, higher commodity prices and the favorable base effect, and these factors should continue to support price pressures in the near term.