UK Inflation Rate YoY (May) Y/Y 2.8% vs. Exp. 3% (Prev. 2.8%); Services 3.7% (exp. 3.7%, prev. 3.2%)

ONS Chief Economist Grant Fitzner:

• After last month’s slowdown, inflation held steady in May as various price movements offset each other.
• The main upward movement came from transport with airfares, vehicle taxes and petrol prices all pushing up inflation.
• These were offset by lower food prices, with decreases in inflation seen across a range of meat, dairy and vegetable items compared to last month, as well as the cost of domestic heating oil, which fell back after climbing in recent months.
• The annual cost of raw materials continued to increase, led by rises in the cost of chemicals, while the increase in the costs of goods leaving factories slowed, partly due to a drop in the cost of domestically produced cars.