Food costs rise as UK’s inflation remains sticky
The Consumer Prices Index (CPI) rose by 3.4% in the 12 months to May 2025, compared with 3.5% in the 12 months to April, data from the Office for National Statistics shows.
On a monthly basis, CPI rose by 0.2% in May 2025, compared with a rise of 0.3% in May 2024. The largest downward contribution to the CPI annual rate came from transport. The largest, partially offsetting, upward contributions came from food, furniture and household goods.
Inflation in April was officially recorded as 3.5% after the ONS had uncovered a mistake, and the rate should have been 3.4%. The error was blamed on incorrect vehicle excise duty numbers from the government.
“A variety of counteracting price movements meant inflation was little changed in May,” said ONS Acting Chief Economist Richard Heys. “Air fares fell this month, compared with a large rise at the same time last year, as the timing of Easter and school holidays affected pricing.”
He added that motor fuel costs also decreased over the period.
“These (drops) were partially offset by rising food prices, particularly items such as chocolates and meat products. The cost of furniture and household goods, including fridge freezers and vacuum cleaners, also increased,” he said.
The UK’s sticky inflation rate means traders have doubled down on forecasts that the Bank of England will not cut rates on Thursday (19 June).
Markets are still expecting two more quarter-point cuts to the base rate by the end of the year, from its current 4.25%. The first of these cuts is expected to happen in August. The Middle East conflict will also complicate upcoming rate decisions, with oil prices up over 14% compared to a week ago.
