020 7898 0500After figures released on Tuesday showed that wage growth is slowing, attention turned to yesterday’s inflation rate. City economists had expected inflation to creep up to 2.5% in May, but it actually stayed unchanged at 2.4%. Analysts believe this is evidence of a weak UK economy and interest rates are likely to be kept on hold next time the Monetary Policy Committee convenes.
Sterling weakened against the euro and dollar following the release (although it later retraced its losses against the dollar), but UK households will be happy that the cost of living burden has not increased. The Office for National Statistics attributed the unchanged rate to the fall in computer game prices and the drop in the cost of sugar, jam, syrups, chocolate and confectionary. However, vegetable prices increased, so the cost of getting your five-a-day has risen.
Today we will see retail sales for May which, year-on-year, are expected to have increased to 2.4% from 1.4%.
