The UK’s annual inflation rate held steady at 2.8% in May, defying city forecasts of a spike to 3.0%. Data from the Office for National Statistics (ONS) shows that a sharp 24.6% surge in fuel costs—stoked by ongoing geopolitical energy disruptions—was successfully offset by cooling prices in supermarkets, clothing, and restaurant bills.
The unexpected stability offers a temporary breather for the Bank of England ahead of its crucial interest rate meeting. However, business groups warn that relief may be short-lived. The British Chambers of Commerce highlighted that firms are still battling severe pressure from rising wage bills and overheads. With energy price caps set to lift next month, economists predict inflation could still climb toward 3.8% by the end of the year.
