UK inflation holds steady at 3.4 pct in May: ONS

A key indicator of domestic price pressure, services inflation, eased from 5.4 percent in April to 4.7 percent in May.

LONDON, June 18 (Xinhua) -- Inflation in Britain remained unchanged in May, with the Consumer Prices Index (CPI) rising 3.4 percent year-on-year, the Office for National Statistics (ONS) reported Wednesday.

This figure is consistent with the Bank of England's latest forecast and marks the second consecutive month of steady inflation.

A key indicator of domestic price pressure, services inflation, eased from 5.4 percent in April to 4.7 percent in May, also in line with expectations.

ONS Acting Chief Economist Richard Heys said the overall inflation rate was "little changed" as falling airfares and motor fuel prices were offset by rising food and household goods costs.

"We saw prices fall this month for flights and fuel, but these were counterbalanced by rising costs for food, particularly chocolate and meat, and for household items such as fridges and vacuum cleaners," he said.

According to the ONS, food inflation rose to 4.4 percent, the highest since February 2024, while household appliance prices saw one of the sharpest increases in over a year.

The data release had an immediate market impact. The British pound strengthened slightly, and investors are now fully pricing in two 25-basis-point rate cuts by the Bank of England before the end of the year.

However, economists widely expect the central bank to hold interest rates steady at 5.25 percent during its policy meeting on Thursday. ■