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Annual inflation falls again

Annual inflation falls again

Category: Economy

Updated: 16/06/2009
First Published: 16/06/2009

MONEYFACTS ARCHIVE
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The rate of annual inflation in the UK fell again in May, decreasing by 0.1 percentage points to 2.2 per cent.

The Consumer Price Index (CPI) has now fallen by 0.7 percentage points compared to the level of inflation in March, according to data from the Office for National Statistics.

The current level of annual inflation is the lowest reading since January 2008, although it is still above the Bank of England's target of two per cent, as it has been for 20 consecutive months.

Downward pressures affecting the change in CPI were caused by food and non-alcoholic beverages, as well as housing and household services, which was driven by a fall in electricity tariffs.

The largest upward pressure put on CPI came from alcoholic beverages and tobacco, which was mainly caused by increased duties imposed by the Budget.

The Retail Prices Index (RPI) also fell by 0.1 percentage points in May and now sits at -1.1 per cent. The pressures put on the measure were similar to those put on CPI, as well as mortgage interest payments.

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