UK inflation holds steady at 4.5%
The UK Consumer Prices Index (CPI) annual rate of inflation held steady in May at 4.5%.
The Retail Prices Index (RPI) measure of inflation – which includes mortgage interest payments – was also unchanged at 5.2%, according to the Office for National Statistics (ONS).
Fuel and food prices continued to be the main contributors, with both components up 1.3% from April.
Air transport costs fell sharply in the month as Easter peak fares ended.
However, over the course of the past 12 months, alcoholic beverages and tobacco recorded a 9.8% increase – the highest year-on-year rise on record – thanks in part to the VAT rise.
Fuel prices also accelerated, up 13.7% compared with a year ago.
The overall inflation figure was in line with market expectations.
It follows a rise to 4.5% in April – the highest inflation rate since October 2008 – from 4% in March.
The Bank of England expects CPI inflation to rise above 5% in the next three months, well above its 2% target.
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