United Kingdom Inflation Rises to 2.7% in May


In May, UK Consumer Prices Index grew by 2.7 percent yoy, up from 2.4 percent in April due to a record rise in air fares and higher fuel prices.

Rises in air fares and clothing prices were the largest contributors to the rise in inflation. Motor fuels also had an upward effect. Average petrol prices fell by 3.1 pence a litre on the month but they fell by a larger 4.5 pence a litre between April and May 2012. Similarly diesel prices fell by less between April and May 2013 than between the same two months a year earlier. There were comparatively modest upward contributions from three other sectors: furniture, household equipment and maintenance, alcohol and tobacco and recreation and culture.

The only notable, but relatively small, downward contribution came from the food and non-alcoholic drinks sector. The downward effects came from a variety of food categories (most notably sugar, jam, syrups, chocolate and confectionery, meat and vegetables) but these were partially counterbalanced by price rises from non-alcoholic drinks.

Taking a longer term view, the three main contributors to the 12-month inflation rate in the last five years have been food and non-alcoholic beverages, housing, water, electricity, gas and other fuels and transport (including motor fuels). Combined, these three sectors have, on average, accounted for over half of the 12-month inflation rate each month.

ONS | Nuno Fontes | nuno@tradingeconomics.com
6/18/2013 10:05:40 AM