Inflation rate stays at 0.3% in May

Bobby Hellard

June 14, 2016

row of houses london

The UK inflation rate stood at 0.3% in May for the second consecutive month, the Consumer Price Index from the Office for National Statistics shows.

Inflation dropped after reaching a 15-month peak of 0.5% in March.

The inflation rate stands well below the Bank of England’s target of 2%.

City house price inflation slows

Maike Currie, Fidelity International’s investment director, said: “With inflation still a far cry from the Bank of England’s 2% target, don’t expect any change this Thursday when the Monetary Policy Committee announces its hand on interest rates.

“Lower for longer will remain the mantra with some expecting the Bank of England to re-enter the Brexit debate this week when it releases its final decision on interest rates before Britain decides its future in the EU.”

Since the financial crisis of 2008 the Bank has kept interest rates at a record low of 0.5% for seven years in a bid to lift economic activity.

The Monetary Policy Committee, the Bank’s interest rate-setting committee, will meet this week to discuss interest rates. Their last meeting saw all nine members vote to hold interest rates.

The Bank’s most recent forecast in May said inflation would remain below 1% until late into 2016 and would stay below the 2% target until 2018.