UK inflation stays at 2.8% in May as lower food costs offset higher petrol prices from the Mideast war, ONS data shows.
LONDON: Britain’s annual inflation rate was unchanged at 2.8% in May as higher petrol prices caused by the US-Iran war were offset by lower food costs, official data showed Wednesday.
The Consumer Prices Index level matched April’s reading, the Office for National Statistics (ONS) said, while an analysts’ consensus forecast had been for an increase to 3.0%.
“While the war in the Middle East pushes prices up globally, we have got the right economic plan and inflation has held steady,” finance minister Rachel Reeves said in response.
Even though the United States and Iran agreed this week to a deal to end the conflict, inflation could still rise in the coming months with energy costs remaining above pre-war levels.
The better-than-expected inflation data for May could meanwhile prove fruitless for the Labour government, which is facing a special vote Thursday expected to set in motion an attempt to oust Keir Starmer as prime minister.
Longtime Starmer critic Andy Burnham is hoping to win an election for a parliament seat in northwest England so that he can run for the Labour leadership, and the premiership.
The inflation data also comes before an interest rate decision by the Bank of England, which is expected to hold borrowing costs steady Thursday after energy prices tumbled in recent days thanks to the US-Iran deal.
