Inflation stays unchanged despite earlier forecasts
UK inflation stayed at 2.8% in May, according to the Office for National Statistics (ONS). Analysts had expected a rise to around 3%, but prices remained steady instead.
Food price growth slowed during the month, helping balance increases in other areas such as transport and fuel.
Experts had warned that global tensions, especially the Middle East conflict, could push prices higher. However, the latest peace deal between the US and Iran may reduce some of that pressure in the coming months.
Transport costs drive inflation higher
Transport prices continued to rise and remained the strongest contributor to inflation.
Motor fuel prices were 24.6% higher than a year earlier. Overall transport inflation reached 6.8%, the highest level seen since December 2022.
ONS chief economist Grant Fitzner said higher costs came mainly from airfares, vehicle taxes, and fuel prices.
Food inflation slows to a 17-month low
Food prices rose at a slower pace compared to previous months. Food inflation dropped from 3% in April to 2.2% in May, its lowest level since December 2024.
Prices for meat, dairy, and vegetables increased, but at a reduced rate.
Beef and veal prices still rose by 9.4% over the year. However, this was lower than the 13.2% rise in April and 18.8% in March, showing a clear slowdown.
Retailers and food industry outlook
The British Retail Consortium said lower food inflation reflects strong competition among supermarkets. Still, it warned that prices could rise again later in the year.
The Food and Drink Federation said retail prices often lag behind production costs. It added that recent global disruptions, including issues around the Strait of Hormuz, have not yet fully affected shop prices.
Chief executive Karen Betts explained that farmers, processors, and manufacturers face higher costs first, and these usually reach consumers after several months. Long term contracts for energy and ingredients also delay price changes.
Inflation trend context
Inflation has moved sharply over recent years. It fell close to zero in late 2020, then surged to 11.1% in October 2022. It later dropped to 1.7% in September 2024 before rising again to 2.8% in May 2026.
