Inflation stagnates at 8.7 per cent as figure is unchanged in latest …
The rate of Consumer Prices Index inflation remained unchanged at 8.7% in May, the Office for National Statistics has said. Analysts had predicted that the figure would fall slightly.
The news is likely to increase fears from borrowers that the Bank of England will increase interest rates again on Thursday as it tightens the screw to get inflation down.
The ONS said rising prices for plane tickets, recreational and cultural goods and services and second-hand cars added the most to inflation. Costs for motor fuel fell, the ONS said, putting the biggest downward pressures on inflation.
ONS chief economist Grant Fitzner said: "After last month's fall, annual inflation was little changed in May and remains at a historically high level. The cost of air fares rose by more than a year ago and is at a higher level than usual for May. Rising prices for second-hand cars, live music events and computer games also contributed to inflation remaining high."
Chancellor Jeremy Hunt said: "We know how much high inflation hurts families and businesses across the country, and our plan to halve the rate this year is the best way we can keep costs and interest rates down. We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy while also providing targeted support with the cost of living."
Shadow chancellor Rachel Reeves said: "This Tory government can't get a grip of this problem because they are the problem. Thirteen years of the Tories and their disastrous mini-budget are damaging our economic security and leaving families worse off.
"Simply continuing on this Tory path of managed decline is not the summit of Labour[1]'s ambition. We need a more secure economy, more secure family finances and a plan to help us grab hold of the opportunities before us. With a relentless focus on the cost of living, our strong fiscal rules and our mission for growth, that is what a Labour government will bring."
Liberal Democrat Treasury spokeswoman Sarah Olney accused the Chancellor of sitting on his hands while inflation drives up interest rates, hitting mortgage holders.
In response to the inflation data, she said: "These worse-than-expected figures show the Government is failing miserably to bring inflation down and provide relief for struggling families facing soaring bills. Homeowners now face the likelihood of even more interest rate hikes adding to their monthly mortgage payments all while the Chancellor just sits on his hands.
"It beggars belief that ministers are refusing to support hard-pressed families when it's this Conservative government's catastrophic failure to run the economy that caused this crisis. This must be the most uncaring government to ever walk into Downing Street. It's as if ministers are living on another planet."
Confederation of British Industry lead economist Alpesh Paleja said "many will have to keep tightening their belts for some time" due to stubbornly high food price inflation. Another interest rate rise from the Bank of England "looks like a done deal", he added, with the prospect of a further increase in August.
"The absence of movement in CPI inflation underscores the persistent nature of current cost and price pressures, with households and businesses left feeling the pinch," Mr Paleja said. "In particular, the ongoing strength in food price inflation means that many will have to keep tightening their belts for some time.
"Although headline inflation is expected to keep falling over the course of the year, it will still stand at double the Bank of England's target by December - making 2023 another difficult year for many households. The latest data also shows signs of stubbornness in more domestically-focused price pressures, most notably in the recent strength of private sector wage growth. As a result, another interest rate rise from the Bank of England looks like a done deal, with the prospect of at least one further rise in August to fully bring inflation under control."