UK inflation at lowest level in four years

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UK inflation at lowest level in four years
Massive discounting in clothing and footwear prices is one of the reasons why inflation was so low in May.
// The CPI fell to 0.5% in May compared to 0.8% in April – the lowest since June 2016, according to ONS
// Clothing price tags helped bring down inflation, as prices fell 3.1% amid heavy discounts during lockdown
// RPI, a separate measure of inflation, was 1% in May, down from 1.5% in April

UK inflation fell to its lowest level in four years last month after a record drop in fuel prices and as clothing and energy costs continued to tumble, official figures have shown.

The ONS said the rate of Consumer Price Index (CPI) inflation fell to 0.5 per cent in May from 0.8 per cent in April – the lowest since June 2016.

However, the ONS said that using an alternative basket of goods, which removes items not available due to the coronavirus crisis, the CPI would have been even lower – at 0.4 per cent in May.


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It comes as fuel prices tumbled by 16.7 per cent last month – the biggest fall on record – while energy costs dropped seven per cent and clothing and footwear price tags fell 3.1 per cent as retailers resorted to heavy discounts amid the lockdown.

“The growth in consumer prices again slowed to the lowest annual rate in four years,” said Jonathan Athow, ONS deputy national statistician for economic statistics.

“The cost of games and toys fell back from last month’s rises while there was a continued drop in prices at the pump in May, following the huge crude price falls seen in recent months.

“Outside these areas, we are seeing few significant changes to the prices in the shops.”

In a sign of the impact of the UK’s Covid-19 lockdown, as clothing price tags fell again sharply amid heavy discounting, food and alcohol prices also saw steep rises – up 1.8 per cent and 2.6 per cent respectively.

The data also showed that the Retail Price Index (RPI), a separate measure of inflation, was one per cent in May, down from 1.5 per cent in April.

The CPI including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – fell to 0.7 per cent in May, down from 0.9 per cent in April.

with PA Wires

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