Annual UK inflation remained at 2.8% in May, defying expectations of a rise to 3% amid energy price pressures.
UK inflation held steady at 2.8% in May, below economists’ forecasts of a 3% increase, according to official data. The figure matches April’s reading, which was driven lower by a temporary adjustment to the regulated energy price cap.
Analysts had anticipated a rebound in inflation due to rising energy costs, with the price cap set to increase by 13% later this summer. The Bank of England recently maintained its key interest rate at 3.75%, citing limited influence over energy prices amid geopolitical tensions.
Markets expect the BoE to hold rates steady at its Thursday meeting, though traders price in a potential hike by year-end. The central bank has warned that energy costs, elevated by the US-Iran conflict, will continue to pressure inflation.