UK inflation rises as food prices rocket for consumers

Glasgow Times

3 hours ago

The rate of Consumer Prices Index (CPI) inflation fell to 3.4% in May from 3.5% in April, the Office for National Statistics (ONS) said.
However, the ONS said that an error in vehicle tax data collected meant April's CPI rate should have been 3.4% – but that it was not revising the official figure.
Most economists were expecting the CPI rate to come in at 3.3% for May as price rises cooled following a raft of bill increases the previous month, that pushed inflation to the highest level in more than a year.
The ONS said that food and non-alcoholic drink prices rose by 4.4% in the year to May – the highest level in more than a year.
Cupboard items like sugar, jam and chocolate as well as ice cream saw the biggest monthly price hikes, while meat costs also rose.
Furthermore, the latest dataset shows that the inflation rate across furniture and homeware was the highest rate over the year to May than since the end of 2023.
On the other hand, air fares fell by 5% between April and May, following the Easter holidays when ticket prices were likely to have been hiked.
Average petrol and diesel prices also dropped, while rail and coach travel costs were also pulling down on the overall rate of inflation last month.
Chancellor Rachel Reeves said there was 'more to do' to bring down inflation and help with the cost of living.
She said: 'We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government, but we know there's more to do.'
Shadow chancellor Sir Mel Stride said: 'This morning's news that inflation remains well above the 2% target is deeply worrying for families.'
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ONS acting chief economist Richard Heys said: 'A variety of counteracting price movements meant inflation was little changed in May.
'Air fares fell this month, compared with a large rise at the same time last year, as the timing of Easter and school holidays affected pricing. Meanwhile, motor fuel costs also saw a drop.
'These were partially offset by rising food prices, particularly items such as chocolates and meat products. The cost of furniture and household goods, including fridge freezers and vacuum cleaners, also increased.'
What will this mean for savers?
'Savers are facing a squeeze," says Sally Conway, savings expert at Shawbrook.
"Inflation is sticking, everyday costs are still rising – and interest rates on many savings accounts have been coming down. With further rate cuts expected, the opportunity to lock in higher returns may not last much longer.
"Yet despite this, many people still stick with the big banks, even when better rates are available elsewhere. Our research shows just only 10% of savers would consider opening a savings account with a lesser-known bank – even though those providers can offer the same protections and often more competitive returns.'
What does this mean for mortgage rates?
'When it comes to interest rates, inflation has morphed from a blip into a block," says Peter Stimson, director of mortgages at the lender MPowered.
'It's proving worryingly sticky and the crescendo of war drums in the Middle East may make things worse.
'Oil prices spiked 5% on Tuesday - reaching their highest level of 2025 so far - and there's a danger that they will push up manufacturing and transport costs in coming months, and allow inflation to take root. That's why the prospects of the Bank of England cutting its base rate again on Thursday - already very slim - have evaporated.
'For anyone planning to buy their first home or remortgage this summer, who'd been assuming that the only way is down for mortgage interest rates, today's data will be an uncomfortable reality check.'