- REUTERS/Neil Hall
LONDON – UK inflation climbed even higher in May as a weak pound continued to push up the prices of everyday goods and services.
The ONS said that the UK’s Consumer Prices Index (CPI) inflation rate – the key measure of inflation – rose to 2.9% in May, up from 2.7% in April.
Economists forecast a 2.7% CPI rate before the release.
CPI measures the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care.
CPIH, a measure which includes owner occupiers’ housing costs – and which the ONS cites as a more useful indicator than CPI – climbed to 2.7% in May, up from 2.6% in April, and its highest level since April 2012.
The sharp fall in the value of the pound following the UK’s vote to leave the EU last year has raised the cost of imports and pushed up the rate of inflation.
Bank of England governor Mark Carney has warned of a “challenging time” for British households as wage growth stagnates and fails to keep up with the increase in the price of goods and services.