Inflation rate falls to 2.5% in May

Consumer price inflation (CPI) was 2.5 per cent in May, down from 2.8 per cent in April, according to the Office for National Statistics (ONS).

The main downward pressure on the CPI annual rate came from average gas and electricity bills which continued to fall this year, but rose a year ago.

There was also downward pressure from food and non-alcoholic beverages, mainly due to vegetable prices falling this year, reflecting good supplies following favourable growing conditions and reports of low demand for some produce. By contrast, vegetable prices rose last year. There was also a large downward effect from changes in the price of meat.

A further large downward effect came from clothing and footwear, where prices were little changed this year but rose a year ago for outerwear, with the main downward contributions coming from jeans and women’s skirts. Small downward effects also came from underwear and clothing accessories.

The main upward pressure on the CPI annual rate came from transport, with large price increases in the cost of air travel, particularly for transatlantic and European routes. Last year, by contrast, fares fell in May, having risen sharply in April when the price collection period coincided with Easter. This year, Easter fell earlier in the month.

RPI inflation fell to 4.3 per cent in May, down from 4.5 per cent in April and was influenced by similar factors to those that affected the CPI. Mortgage interest payments, which are excluded from the CPI, had a small upward contribution to the change in the RPI annual rate, with some lenders passing on this May’s quarter point increase in the Bank Rate.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 3.3 per cent in May, down from 3.6 per cent in April.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is above average for the European Union as a whole. The provisional inflation rate for the EU 27 in April was 2.2 per cent, compared with the UK rate of 2.8 per cent for the corresponding period.