Inflation held steady in May, according to new figures from the Office for National Statistics (ONS).
Measured by the Consumer Prices Index (CPI), inflation came in at 3.4%, compared with 3.5% in April – a figure the ONS has since said was overstated by 0.1% due to a mistake in car taxes. This puts inflation in line with the Bank of England’s May forecast and slightly above market forecasts of 3.3%.
The largest downward contribution to the figure came from transport; the largest, partially offsetting, upward contributions came from food, and furniture and household goods.
Furthermore, with recent increases in energy prices arising from conflict in the Middle East, renewed price pressures are anticipated.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, came in at 3.5% in May, down from 3.8% in April, and lower than forecast.
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