Inflation soars past Bank of England & analyst targets to 2.1% in May

Inflation soars past Bank of England target to 2.1% in May
The latest inflation reading was also significantly ahead of the expectations of analysts.
// ONS says CPI hit 2.1% in May – ahead of Bank of England’s target of 2%
// This compares to a 1.5% inflation rate in April
// Clothing prices increased by 2.3%, the biggest rise since 2018, and played a big role in May’s inflation surge

The UK’s rate of inflation leapt higher last month, with more expensive clothing prices being one of the main drivers behind it.

The ONS said the Consumer Prices Index (CPI) hit 2.1 per cent for May, ahead of the Bank of England’s two per cent target.

It represented an increase on the 1.5 per cent reported by the ONS for April.


The latest reading was also significantly ahead of the expectations of analysts, who had forecast a 1.8 per cent rate for May.

Last week, the Bank of England’s chief economist Andy Haldane said a rise in inflation above the central bank’s target must be only temporary, and that long-term levels of high inflation need to be “avoided at all costs”.

ONS chief economist Grant Fitzner said: “The rate of inflation rose again in May and is now above two per cent for the first time since the summer of 2019.

“This month’s rise was led by fuel prices, which fell this time last year but have jumped this year, thanks to rising crude prices.

“Clothing prices also added upward pressure as the amount of discounting fell in May.”

Clothing prices increased by 2.3 per cent, the biggest rise since 2018, as retailers significantly reduced their discounting a month after welcoming customers back into stores.

This inflation was only partly offset by a negative impact from cheaper food and drink prices.

Bread, cereals and meat prices all dipped after seeing significant rises a year earlier.

The Retail Price Index (RPI), a separate measure of inflation, increased to 3.3 per cent from 2.9 per cent in April.

The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 2.1 per cent in May, up from 1.6 per cent last month.

with PA Wires

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