Inflation cools in May as travel price rises slow
The Consumer Prices Index fell to 2% in May.
UK inflation cooled off in May as price rises for travellers slowed down during the lull after the Easter rush, new figures showed.
The Office for National Statistics (ONS) shows the Consumer Prices Index (CPI) fell to 2% in May, down from 2.1% in April.
The rate was in line with economist expectations and was also dead on the Bank of England’s 2% inflation target.
Mike Hardie, head of inflation at the ONS, said: “Inflation eased in May, as travel prices such as air fares fell back after their Easter highs in April. The overall rate of inflation has remained steady since the beginning of the year.”
In April, Easter holiday getaways boosted prices for transport services by 10.4%. This slowed to 3.9% in May.
Raw materials prices rose 1.3% on the year to May, which is down from 4.5% in April. Crude oil provided the largest downward contribution to the change in the annual rate of input inflation https://t.co/aTAjjAFXUb pic.twitter.com/d2WBpxPgUP— Office for National Statistics (@ONS) June 19, 2019
Air fares in particular saw a significant unwinding, with April’s 31.4% price rise dropping to 13.3% in the following month.
Rail, road and sea transport also all showed smaller rates of growth last month.
But travellers faced climbing prices at hotels and hostels, with accommodation services rising 3.9% on the year in May, compared to a 1.4% increase in the prior month.
At the pumps, petrol prices were up 4.2p per litre to 128.3p. Diesel climbed 2.8p to 135.8p.
Upward pressure came from recreation and culture, especially the games, toys and hobbies category which includes video games. Prices for this sector were up 0.3% on the year in May, compared to the previous month’s 3.3% dip.
Wine and beer also had a positive contribution, with beer recovering from April’s 0.1% price dip to rise 1.1% while wine continued to become more expensive with a 2% rise on the year.
However spirits declined 2.5%, accelerating from a 0.2% decrease in April.
The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 1.9% in May, down from 2% in April.
The Retail Prices Index (RPI), a separate measure of inflation, was 3%, unchanged from April.