Figures show inflation has stayed at 3.4% for a second month.
Matthew Allen, lecturer in economics and macroeconomic expert at the University of Salford, comments: “The figures show UK consumer price inflation stuck at 3.4% for a second month, even after the Office for National Statistics revised April’s print to correct a tax-data error. The main driver is food: grocery prices are still climbing at almost twice the overall rate, offsetting cheaper air fares and package holidays that have nudged transport costs lower.
“Inflation’s descent is being slowed by forces that reach well beyond the supermarket aisle. Across the Atlantic, Donald Trump’s renewed push for “reciprocal” import tariffs is already feeding through to higher input costs for British manufacturers. Closer to home, April’s increase in employer National Insurance contributions and the rise in the National Living Wage have squeezed company margins, prompting many firms to pass at least part of that burden on to consumers.
“Looking ahead, geopolitical risk looms large. Any escalation in the Middle East that disrupts energy supplies could push headline inflation back up next month, making the path to the Bank of England’s 2% target even trickier.
“Against this backdrop, last month’s precautionary cut leaves Bank Rate at 4.25%. With price pressures proving stickier than hoped, the Monetary Policy Committee is likely to sit tight at its June meeting. Holding rates now would give policymakers more time to assess whether underlying inflation, especially in services, is finally on a sustainable downward track.”