UK inflation slowed from 3.5% to 3.4% year-on-year in May

According to the UK’s Office for National Statistics, annual inflation eased slightly in May but remained above the Bank of England’s 2% target.

The UK’s consumer price index increased by 3.4% year-on-year in May, down slightly from April’s 3.5%. On a monthly basis, inflation slowed from 1.2% in April to just 0.2% in May.

The core consumer price index, excluding energy and food prices, rose by 0.2% month-on-month and 3.5% year-on-year in May.

Investing.com notes that April’s figures were elevated due to surging labor costs, including higher minimum wages and increased National Insurance contributions. However, Rob Morgan of Charles Stanley expects the impact of these factors to gradually fade in the coming months.

The analyst notes that British households continue to face financial strain despite wage growth. Rising costs for utilities, groceries, and mortgage payments are eating into additional incomes, leaving little room for savings.