Oil price in US$

Oil in US$ had risen sharply since 2009. Then last year, the oil price fell. The price of oil has risen again since then, and the cost of European crude is now £69/barrel, up around 12% since the start of 2011.

May UK CPI was up 2.7% year-on-year; up from April's 2.4%. Meanwhile, RPI was up 3.1% on a year ago, compared with 2.9% in April.

Oil prices lead year-on-year percent changes in our cost of living by around three months. A rising oil price may see inflation rise further.

CRB/Reuters food index

With around 11% of the UK CPI consisting of foodstuffs, this index is a useful indicator of future cost of living rises. Food prices are more volatile than changes in the overall cost of living.

The index rose by more than 10% last year, but of now, the index is in fact down around 5% year-on-year.

That could indicate that Britain's inflationary pressures are easing for the moment.

Chinese inflation

Many of the goods we buy in our shops are made in China. So China's inflation rate is now a major determinant of the UK's cost of living.

For years, we've been used to paying lower prices on our Chinese imports. But soaring wages and pricier food had been steadily driving up CPI in China and that meant higher costs for British consumers.

This year has seen Chinese inflation start to creep up again - May's Chinese CPI was up by 2.1% year-on-year - which will add to Britain's inflationary burden.

The CBI MTE survey

This survey gives the latest snapshot of UK manufacturing trends. It's a handy guide to price pressures at the factory gate – and to CPI inflation.

For May, this sub-index stood at 4, ie, 4% more survey respondents expected their selling prices in three months' time to be higher rather than lower.

The index leads UK inflation by some two months. The latest downtick suggests some inflationary pressures in Britain are easing for now.

The producer price index (PPI)

The 'output' PPI - often called the 'factory gate' price – measures what the UK's manufacturers charge their retail customers, who in turn sell on to us.

PPI output prices tend to be more volatile than consumer prices, but the overall trend is similar and they are a handy warning indicator.

May's output PPI was 1.2% higher year-on-year. This latest uptick in PPI suggests there is still some inflationary pressure in Britain for the moment.

UK average weekly earnings (AWE) index

If wages rise, employers try to pass these costs onto customers by raising prices, thus pushing up inflation. UK labour costs are rising.

April AWE index shows total UK wages climbing an annualised 1.3% - higher than before.

A sudden jump in pay packets would add to inflationary pressures and could force a rate hike sooner than expected.

The BRC Nielsen shop price index

This is a key indicator of what's happening to prices in Britain's shops. So it's a very handy guide as to what to expect from UK CPI inflation.

In May, the BRC Neilsen Shop Price index was up 0.4% year-on-year. It tends to be 1-2% below UK CPI.

So the recent downtick in the SPI suggests some inflationary pressure in Britain is easing.