UK inflation drops slightly in May, driven by lower air fares and transportation costs.

From Yahoo Finance: 2025-06-18 07:15:00

In the UK, inflation dropped slightly in May due to lower air fares and transportation costs, offset by higher food prices, including chocolate. Consumer prices rose by 3.4% in the year to May, remaining above the Bank of England’s target rate of 2%. Economists expect interest rates to stay at 4.25%.

The increase was less than expected, with economists anticipating a 3.3% rate for May. Food and non-alcoholic drink prices rose by 4.4%, driven by higher prices for items like sugar, jam, chocolate, ice cream, and meat. Economists predict inflation will stay above target due to global uncertainties.

Economists, like Felix Feather from Aberdeen, forecast the Bank of England will continue reducing rates quarterly. Geopolitical uncertainty, including Trump’s trade policies and unrest in the Middle East, pose risks to this forecast. Inflation is expected to remain elevated throughout the year.



Read more at Yahoo Finance: UK inflation eases by less than anticipated ahead of Bank of England rate decision