Inflation defies expectations because it FAILS to fall in Might sticking at 8.7% -with Jeremy Hunt making clear he backs Financial institution of England climbing rates of interest AGAIN tomorrow… and will they hit 5%?
Inflation defied expectations by failing to fall final month – with Jeremy Hunt making clear he backs robust motion by the Bank of England tomorrow.
The headline CPI got here in at 8.7 per cent in Might, the identical because the determine for April.
Analysts had pencilled in a drop to eight.4 per cent.
The ‘stickiness’ of worth rises – staying considerably increased than different international locations – will ramp up issues inflation has grow to be embedded within the financial system.
There’s hypothesis that Threadneedle Avenue might now go for a half-point rise to five per cent when the Financial Coverage Committee meets tomorrow, relatively than the 0.25 proportion factors beforehand anticipated.
The headline CPI got here in at 8.7 per cent in Might, the identical because the determine for April
Chancellor Jeremy Hunt mentioned he would help the Financial institution of England to ‘squeeze inflation out of our financial system’
Though there was a morsel of reduction with meals inflation easing marginally to 18.3 per cent, core inflation really rose from 6.2 per cent within the yr to April to six.5 per cent within the yr to Might. That was the best charge for over 30 years
The Chancellor mentioned: ‘We all know how a lot excessive inflation hurts households and companies throughout the nation, and our plan to halve the speed this yr is one of the best ways we will maintain prices and rates of interest down.
‘We won’t hesitate in our resolve to help the Financial institution of England because it seeks to squeeze inflation out of our financial system, whereas additionally offering focused help with the price of residing.’
The ONS mentioned rising costs for aircraft tickets, leisure and cultural items and companies and second-hand automobiles added probably the most to inflation.
Prices for motor gas fell, the ONS mentioned, placing the most important downward pressures on inflation.
Chief Economist Grant Fitzner mentioned: ‘After final month’s fall, annual inflation was little modified in Might and stays at a traditionally excessive degree.
‘The price of airfares rose by greater than a yr in the past and is at a better degree than traditional for Might. Rising costs for second-hand automobiles, stay music occasions and laptop video games additionally contributed to inflation remaining excessive.
‘These have been offset by a fall in the price of petrol. Meals worth inflation stays excessive, however the charge has eased barely this month with prices rising extra slowly than this time final yr.’
Analysts had pencilled in a drop in CPI to eight.4 per cent
