UK inflation comes in at 3.4% in May, right in line with forecasts

The UK inflation rate held at 3.4% in May, consistent with forecasts. April’s rate was revised down from 3.5% due to previous calculation errors. Transport cost decreases played a crucial role in maintaining this inflation rate, despite price increases in food and furniture.

Core inflation fell to 3.5%, excluding volatile items like food and energy. Richard Heys from ONS noted that varied price movements kept May’s inflation stable, with airfare and motor fuel costs contributing to the decline.

Following the inflation data release, the British pound gained 0.22% against the US dollar. Analysts predict the Bank of England will maintain interest rates at 4.25%, with future decisions influenced by recent developments in energy prices.