MercoPress. South Atlantic News Agency

UK inflation steady at 2.4% in May, but fuel prices are climbing fast

Inflation has been falling since November last year. The rise in oil prices also drove up raw material costs for companies, which jumped by 9.2%.

Inflation in the UK remained at 2.4% in May, according to the Office for National Statistics (ONS), after its fall was halted by a sharp rise in fuel costs. The ONS said that fuel prices increased by the biggest monthly amount since January 2011, rising by 3.8%.

Mike Hardie, head of inflation at the ONS said: “Recent large rises in the cost of crude oil have fed through to prices paid by consumers at the pump.”

Inflation has been falling since November last year. The rise in oil prices also drove up raw material costs for companies, which jumped by 9.2%. The effect was also seen in rising prices for air and ferry travel.

“While inflation appears to be under control there are signs in the data, and outside it,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.

“Petrol prices are up 8% over the course of the year, and all the Big Six energy firms are putting up prices this summer, which is yet to feed into the numbers,” he said.

On Tuesday, the ONS said wage growth slowed to 2.8% in the three months to April from 2.9%. Data also revealed that manufacturing output fell 1.4% in April, the biggest decline for nearly six years.

The rise in fuel prices was offset by a fall in “recreational and cultural goods and services”, in particular computer games.

The ONS said: “Prices for these games are heavily dependent on the composition of bestseller charts, often resulting in large overall price changes from month to month.”
It also said food prices dragged on inflation, specifically products such as sugar, jam, syrups, chocolate and confectionery.

The committee which sets interest rates at the Bank of England will consider the latest inflation figures when it meets next month.

Economists are divided over when the Bank will raise interest rates, some are betting on August of this year, but others think it will hold off until 2019.