Inflation holds steady at 2.8 as food price rises ease

Inflation held steady at 2.8% in May, the same rate as April, according to the Office for National Statistics. Economists had expected a rise to 3%, but contrasting price moves left the overall pace unchanged. Transport pressures rose as airfares, vehicle taxes and petrol edged higher, while lower prices for meat, dairy and vegetables trimmed the gains.

Food inflation eased to 2.2% from 3% in April, and heating oil costs retreated after recent climbs. Petrol averaged 157.4p per litre in May, up 0.6p from April, feeding transport inflation at 6.8%, the highest since November 2022. The Bank of England expects inflation to rise toward 3.6% later this year, while Ofgem’s energy cap keeps bills down and Chancellor Rachel Reeves said relief measures on energy and fuel protect households and businesses.