As measured by the consumer prices index (CPI), inflation came in at an annual rate of 2% (which is bang on the Bank of England’s target inflation rate). That’s a little lower than April’s figure of 2.1%.
Transport costs helped to pull the rate down, as prices fell sharply between April and May, particularly prices of flights, compared to last year, when prices rose sharply. That’s simply down to the timing of Easter (prices shoot up during the Easter holidays, as any parents out there know only too well).
Pushing the rate upwards was a rise in the cost of computer games and toys, plus hotel stays (all of which rose in price more rapidly between April and May this year than they did last year), as well as food and non-alcoholic drink costs, which rose between April and May this year, but fell a year ago.
Here’s how CPI has changed over the last ten years, courtesy of the Office for National Statistics.
As measured by the retail prices index, excluding mortgage costs (RPIX – which was the Bank’s target up until 2003), annual inflation came in at 3% (a bit above the old 2.5% target measure). That was the same as April.
Here’s what’s happened to RPIX over the last ten years.
If you want to know more on the difference between these measures, check out my colleague Merryn’s popular explainer.