UK inflation drops to 2 percent, hitting Bank of England targets

New figures drawn up by the Office for National Statistics (ONS) have shown inflation in the UK fell to 2 percent during May, hitting the Bank of England’s target.

According to ONS, the consumer prices index (CPI) rose 2 percent in the 12 months to May 2024, dropping from 2.3 percent in the 12 months to April.

Including owner occupiers’ housing costs (CPIH), this figure rose to 2.8 percent over the most recent period.

ONS cited the annual rates of food as a defining contribution to the monthly downward trend, noting that prices had fallen this year but rose a year ago.

For the clothing and footwear sector, CPIH for the 12 months to May fell to 3 percent, down from April’s 3.7 percent.

This category also contributed to the downward trend among the CPIH all goods index, which dropped 1.3 percent compared with a fall of 0.8 percent in April. ONS stated that this was the largest annual fall since August 2016.

Responding to the latest figures, director of insight at the British Retail Consortium, Kris Hamer, said that the country would “breathe a sigh of relief” at the inflation update.

He added that while the 2 percent target was welcome news, progress should not be taken for granted by the next government, adding: “Retailers are working hard to limit price increases for their customers, and the next administration must play their part in reducing cost pressures on retailers and the customers they serve.

“Addressing key costs such as the business rates burden, which leads to customers paying a higher price at the till, must be a priority for whoever forms the next government.”