19 June: Bank Of England Expected To Hold Borrowing Costs At 5.25%
Annual inflation fell to 2% in the year to May 2024, its lowest level since July 2021, down from 2.3% recorded a month earlier, Andrew Michael writes.
This puts the rate at which prices are rising at the Bank of England’s long-term target, set by the government. But commentators say the news is unlikely to prompt the Bank to reduce borrowing costs when it announces its next Bank Rate decision tomorrow.
Today’s announcement from the Office for National Statistics (ONS) will be welcomed by individuals and businesses alike who endured a prolonged period of soaring prices through 2022, when the inflation figure hit 11.1%. It remained elevated for much of last year.
The monthly reading of the Consumer Prices Index (CPI) showed that prices rose by 0.3% in May compared with a figure of 0.7% a year earlier.
According to the ONS, the largest downward contribution to today’s headline figure came from food, with prices falling this year having risen at the same stage a year ago. Offset against this was the rising cost of motor fuel.
Core CPI, which omits volatile data covering food, energy and tobacco, stood at 3.5% in the year to May, compared with 3.9% a month earlier.
CPI including owner-occupier costs (CPIH) stood at 2.8% in the year to May 2024, compared with 3.0% 12 months earlier. On a monthly basis, CPIH rose by 0.4% in May 2024 against a figure of 0.6% for the same…
