The speed of inflation has tumbled to its lowest degree since 2016 regardless of official figures suggesting store costs remained comparatively steady in the course of the COVID-19 lockdown final month.
The Workplace for Nationwide Statistics (ONS) mentioned the Client Costs Index (CPI) measure fell to 0.5% in Might from an annual price of 0.8% the earlier month.
The speed had stood at 1.5% in March, when efforts to sluggish the unfold of coronavirus started in earnest.
The easing is welcome for UK family budgets, at a time when jobs and wage progress are below vital stress amid the financial hunch ensuing from the lockdown.
Figures launched on Tuesday by the ONS advised greater than 600,000 folks had misplaced their jobs throughout April and Might regardless of authorities help schemes for each companies and wages.
The quantity crunchers mentioned the primary downward contribution to inflation in Might got here from motor fuels following a document drop of just about 17% in prices on the pump – constructing on earlier falls in April on account of a collapse in world oil costs.
It additionally charted persevering with declines in clothes and vitality costs – falling 3% and seven% respectively final month in comparison with a yr earlier.
The ONS mentioned that another basket of products it had created, which stripped out objects not accessible in the course of the lockdown, advised the CPI price would have been even decrease at 0.4%.
Its deputy nationwide statistician for financial statistics, Jonathan Athow, mentioned: “The expansion in shopper costs once more slowed to the bottom annual price in 4 years.
“The price of video games and toys fell again from final month’s rises whereas there was a continued drop in costs on the pump in Might, following the large crude value falls seen in latest months.
“Outdoors these areas, we’re seeing few vital adjustments to the costs within the retailers.”
The figures are the final main knowledge set forward of the subsequent rate of interest determination by the Financial institution of England’s financial coverage committee (MPC) on Thursday.
Its key mandate is an inflation goal of two% and there was hypothesis it might set its core Financial institution price at a damaging degree, for the primary time in UK historical past, in a bid to assist restore exercise within the virus-ravaged economic system.
It at the moment stands at 0.1%.
Nonetheless, the Financial institution’s governor Andrew Bailey has lately spoken of indicators the economic system is coming again to life.
Yael Selfin, chief economist at KPMG, mentioned: “(The) Financial institution of England’s MPC determination, which is due tomorrow, is anticipated to incorporate some bolstering of its quantitative easing (QE) programme, because it makes an attempt to offer extra help for the economic system.
“Extra controversial measures, comparable to a transfer to damaging rates of interest, are more likely to stay on maintain for now.”