Inflation in Britain slowed to the target 2% in May for the first time since July 2021

According to the UK National Statistics Office (ONS), consumer prices rose by 2% year-on-year in May. This means a slowdown in inflation from 2.3% in April and reaching the Bank of England's target level for the first time since July 2021. Analysts also predicted a decline to 2%.

On a monthly basis, consumer prices increased by 0.3%, similar to April.

The consumer price index excluding food, alcohol, tobacco and energy (core inflation, CPI Core) increased by 3.5% y/y, which is the lowest value since October 2021, and by 0.5% on a monthly basis. In April, these figures were 3.9% and 0.9%, respectively.

Retail price growth (RPI) slowed to 3% y/y from 3.3% in April. This index is used by British employers to negotiate salaries. The difference in the dynamics of the CPI and RPI indices is explained by taking into account housing costs in RPI and the different weights of air fares, insurance and gasoline prices.

On a monthly basis, the RPI increased by 0.4% after an increase of 0.5% in the previous month.