CPI inflation rises to 3.3 per cent in May

Consumer Prices Index (CPI) annual inflation – the Government’s target measure of inflation – was 3.3 per cent in May, up from 3.0 per cent in April.

The largest upward pressure came from food and non-alcoholic beverages, mainly meat and vegetable prices which rose this year but fell a year ago. This effect was partially offset by fruit prices rising, but by less than a year ago.

There were further large upward pressures from:

housing and household services due to gas and electricity bills, which were unchanged this year but fell a year ago, and heating oil prices, which rose this year but fell a year ago in part reflecting the rise in the price of crude oil this year

recreation and culture, from across a range of goods and services. The main upward pressures came from books, newspapers and stationery where prices rose by more than a year ago, and foreign holidays where prices rose this year but fell a year ago. The upward effects were partially offset by a downward contribution from recording media, in particular pre-recorded DVDs

Small upward effects came from:

alcoholic beverages and tobacco, where prices of alcoholic drinks rose this year but fell a year ago, particularly the price of spirits

miscellaneous goods and services where prices rose this year, but fell a year ago

furniture and household goods, with the largest effect coming from goods and services for routine household maintenance which includes items such as household cleaning products and domestic services

Retail Prices Index (RPI) inflation rose to 4.3 per cent in May, up from 4.2 per cent in April. The main factors affecting the CPI also affected the RPI. Additionally, there was a large downward contribution from housing. The effect came mainly from mortgage interest payments as lenders passed on April’s quarter point decrease in the bank rate and, to a lesser extent, from house depreciation. Both mortgage interest payments and depreciation are excluded from the CPI.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 4.4 per cent in May, up from 4.0 per cent in April.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in April, at 3.0 per cent, was below the provisional figure for the European Union as a whole of 3.6 per cent.