Inflation hits 2% target for first time in three years
According to the Office for National Statistics, the decline was largely thanks to falling food prices, with prices falling this year but rising a year ago
UK inflation has hit its target for the first time in almost three years, as consumer price inflation eased to 2% in the year to May, down from a rise of 2.3% the prior month. The Bank of England last hit the 2% target in July 2021. According to the Office for National Statistics, the decline was largely thanks to falling food prices, with prices falling this year but rising a year ago.
The largest upward contribution came from motor fuels, however, with prices rising slightly this year but falling a year ago.
The prices of food and non-alcoholic beverages rose by only 1.7% in the year to May 2024, down from 2.9% in the year to April. This figure marks the lowest annual rate since October 2021, as the rate eased for the 14th consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.
Elsewhere, the prices of furniture and household goods rose by 0.2% between April and May 2024, compared with a larger monthly rise of 1.1% a year ago. On an annual basis, these prices fell by 1.8% in the year to May, compared with a fall of 0.9% in the year to April. The annual rate in May 2024 was the lowest since December 2000.
Core inflation, which excludes energy, food, alcohol and tobacco, was also on the decline, rising by 3.5% in the 12 months to May 2024, down from 3.9% in April.
Commenting on the figures, the BRC warned that the next government must not take the falling inflation rate for granted.
Kris Hamer, Director of Insight of the British Retail Consortium, said: “Hitting the 2% target is welcome news, however, it is vital that inflationary progress is not taken for granted by the next government.
“Retailers are working hard to limit price increases for their customers, and the next administration must play their part in reducing cost pressures on retailers and the customers they serve. Addressing key costs such as the business rates burden, which leads to customers paying a higher price at the till, must be a priority for whoever forms the next government.”
