UK inflation slowed to 2% in May in line with expectations

The Office for National Statistics revealed today that inflation fell to the Bank of England’s forecast rate of 2% in May, with the headline reading falling from 2.3% in April.

Services inflation, which the Bank of England closely monitors due to its dominance within the UK economy and its reflection of rising domestic prices, reached 5.7% in May, compared to 5.9% during the previous month, according to Reuters.

Core inflation, excluding energy, food and tobacco, fell to 3.5% from 3.9% in April.

Unusually bad weather has led to the slowest increase in grocery sales in two years, new figures released by British market research firm Kantar showed on Tuesday. Grocery sales rose 1% in the four weeks through June 9, marking the 16th straight monthly decline in food price inflation, according to the index.

The Bank of England is scheduled to meet on Thursday to issue its latest interest rate decision and provide its forecasts on the future path of inflation. The bank is widely expected to keep interest rates steady at 5.25%, where they have been since August 2023 – when inflation was hovering around 7.9%.