Inflation rises in May
THE UK re-emerged from deflation in May with inflation rising, figures released today have shown.
The Office for National Statistics said the Consumer Prices Index (CPI) rose by 0.1% in the year to May 2015, compared with a 0.1% fall in the year to April.
Transport services provided the largest upward contribution to the figures, notably air fares with the timing of Easter in April a likely factor in the movement. There were also significant upward effects from food and motor fuels.
The largest factor helping to offset the rises came from the recreation and culture sector, particularly games, toys and hobbies (such as computer games) and data processing equipment.
Business leaders in Greater Birmingham were positive about the move back to inflation.
Greg Lowson, president of Birmingham Chamber of Commerce, said the figures illustrated there was still momentum in the economy.
He said: “Today’s rise in inflation indicates that, as I and many others predicted, last month’s fall into deflation was only a temporary blip and did not represent the actual momentum in the UK economy.
“The strong upward impact of transport services, food, and motor fuels on the inflation rate proves that household consumption will continue to be an important economic driver going forward.
“The business community especially welcomes today’s figures as the positive inflation rate should enable business leaders to operate in a more predictable context and afford them increased economic flexibility as a result.”
He said with earnings rising well ahead of inflation, this was good news for households and businesses alike, helping to support living standards and reinforcing the chamber’s view that the UK economy was on the up.
