UK inflation little changed in May

The inflation rate in the UK was little changed in May, compared to last month. Here, John Stepek looks at what's been happening to prices in the UK.

John Stepek
By John Stepek
published

190619-inflation

The price of food rose between April and May this year
(Image credit: Chris J Ratcliffe / Bloomberg)

The inflation rate in the UK was little changed in May, compared to last month.

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).

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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.

190619-WA01-CPI

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.

190619-WA02-RPI

If you want to know more on the difference between these measures, check out my colleague Merryn's popular explainer.

John Stepek
John Stepek

John is the executive editor of MoneyWeek and writes our daily investment email, Money Morning. John graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news. John joined MoneyWeek in 2005.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.

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