Inflation in the UK has fallen to the 2 per cent target for the first time in nearly three years, the Office for National Statistics said on Wednesday.
This is encouraging news for consumers as it means that although prices have risen year-on-year, they are not rising as much as before.
Despite hitting its inflation target, many experts are still predicting that the Bank of England will keep the base rate at 5.25 per cent on Thursday, with a cut likely later in the year.
Food and non-alcoholic drinks were again the main driver of lower inflation as prices for these goods rose by just 1.7 per cent in the year to May 2024, down from 2.9 per cent in the year to April. This is the 14th consecutive month that this sector has seen a decline in the annual inflation rate.
Looking at the sector in more detail, annual inflation slowed in all categories except oils and fats and milk, cheese and eggs. At the same time, breakfast cereals, crisps and chocolate bars were among the items whose prices fell the most.
Leisure and culture, as well as furniture and household goods, also contributed significantly to the decline in inflation. Notably, prices in the furniture and household goods category fell by 1.8 per cent in the year to May, the lowest since December 2000.
In contrast, prices in the transport category as a whole rose by 0.3% in the year to May, the first annual price rise since October 2023. And, particularly frustrating for drivers, petrol prices rose from 144.4 pence per litre in May 2023 to 148.8 pence per litre in May 2024.
