UK consumer price inflation held steady at 2.8% in the 12 months to May 2026, unchanged from April and below the 3.0% rate economists polled by Reuters had forecast, the Office for National Statistics said on Tuesday. On a monthly basis, CPI rose 0.2%, the same rate recorded in May 2025. The ONS said the largest upward contribution to the annual rate came from transport, while the largest downward contribution came from food and non-alcoholic beverages.
Transport prices rose 6.8% in the 12 months to May, up from 4.5% in April, the highest annual rate since December 2022 [Source: Office for National Statistics]. Air fares rose 10.3% month-on-month in May, and the average price of petrol climbed 0.6 pence per litre between April and May to 157.4 pence per litre, the highest since November 2022 [Source: Office for National Statistics]. Food prices, meanwhile, rose at their slowest rate since December 2024 [Source: The Guardian]. Core CPI, which excludes energy, food, alcohol and tobacco, rose 2.6% in the 12 months to May, up from 2.5% in April, while CPI services inflation rose from 3.2% to 3.7% over the same period [Source: MoneyWeek]. CPIH, which includes owner-occupiers' housing costs, held at 3.0% [Source: MoneyWeek].
Grant Fitzner, Chief Economist at the ONS, said inflation held steady in May 'as various price movements offset each other, with the main upward movement coming from transport including airfares, vehicle taxes and petrol prices' [Source: ITV News]. Chancellor Rachel Reeves said the government 'has the right economic plan' and that inflation had held steady 'despite the war in the Middle East pushing prices up globally' [Source: MoneyWeek]. Sterling attracted sellers in an immediate reaction to the softer-than-expected print [Source: Mitrade]. Bloomberg characterised UK price pressures as 'weaker than feared even before a US deal to end the Iran war sent energy costs tumbling' [Source: Bloomberg]. The UK's 2.8% reading came in below the euro zone's 3.2% reading for May and well below the US May inflation rate of 4.2% [Source: CNBC].
The data arrives one day before the Bank of England's interest rate decision, at which policymakers are expected to hold rates at 3.75% [Source: CNBC]. The Bank's forecasts from April had predicted inflation would average around 3.1% in the second quarter of 2026 and peak at around 3.6% in a more benign scenario related to the Middle East conflict [Source: ITV News]. The US and Iran announced over the weekend a framework deal to end their nearly four-month war, with both sides saying the Strait of Hormuz will reopen after an agreement is signed in Geneva later this week [Source: CNBC].
The May reading follows a sharp drop in inflation in April, when CPI slowed to 2.8% from 3.3% in March after Ofgem lowered its energy price cap by 7%, equivalent to around £10 a month for the average dual-fuel household, from the start of April [Source: ITV News]. That price cap is due to rise by 13% later this summer, with a typical annual household energy bill rising by £221 to £1,862 from July [Source: London Datastore (GLA)].
Sources: Office for National Statistics, CNBC, MoneyWeek, ITV News, The Guardian, Bloomberg, Mitrade, London Datastore (GLA)