The annual inflation rate in the United Kingdom stood at 3.4% in May, aligning with economists’ expectations, as reported by the Office for National Statistics (ONS) on Wednesday.
Earlier, the ONS had indicated a 3.5% inflation rate for the year ending in April. However, this figure was later revised down due to a miscalculation involving car tax data, which overstated the inflation rate. Without this error, the April figure would have also registered at 3.4%. The ONS typically does not amend inflation figures once released, which is why the initial report remained unchanged.
The most recent data shows that core inflation, which excludes volatile categories such as energy, food, alcohol, and tobacco, increased by 3.5% year-over-year in May, a decrease from 3.8% in April.
According to the ONS, the primary downward contributor to the monthly inflation change was transportation costs, while significant upward influences stemmed from prices of food, furniture, and household goods.
Richard Heys, acting chief economist at the ONS, remarked, “A variety of counteracting price movements meant inflation was little changed in May.” He noted that airfares experienced a drop this month in contrast to a steep rise during the same period the previous year, influenced by the timing of Easter and school holidays. Additionally, motor fuel prices also declined.
Following the release of these figures, the British pound appreciated by 0.22% against the U.S. dollar, reaching $1.345.
U.K. Finance Minister Rachel Reeves commented on the data, stating that the Treasury had made “the necessary choices to stabilize the public finances and get inflation under control,” while recognizing that “there’s more to do.”