Fuel bills help increase inflation
Latest figures from the Office for National Statistics (ONS) show that Consumer Price Index (CPI) annual inflation the Government’s target measure rose to 2.2 per cent in May, up from 2.0 per cent in April.
The largest upward effect came from gas and electricity bills which continued to increase by more than a year ago, reflecting the phasing in of recent tariff increases from major suppliers.
There were also large upward effects from: food and non-alcoholic beverages, mainly due to vegetable prices which increased this year but fell a year ago; and clothing and footwear, where prices rose by more than last year, reflecting higher priced replacement stock this year and more widespread sales a year ago, particularly on footwear and children’s clothing.
The main downward pressure came from transport where the cost of air travel fell this year for both long-haul and domestic fares but increased a year ago. This was partially offset by petrol prices, which rose this year but fell a year ago.
Retail Price Index (RPI) inflation rose in May to 3.0 per cent up from 2.6 per cent in April. The main factors influencing it were similar to the CPI including the upward pressures from petrol prices and the increases in gas and electricity bills and the downward pressure from airfares. Housing costs excluded from the CPI also had an effect on the RPI this month,following an increase in the depreciation component (the amount needed tokeep a house at current market value).
RPIX inflation the all items RPI excluding mortgage interest payments
is 2.9 per cent in May, up from 2.4 per cent in April. As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is slightly below the average for the European Union as a whole. The provisional inflation rate for the enlarged EU 25 in April was 2.3 per cent, compared with the UK figure for the same month of 2.0 percent.
