Three-year battle against inflation over as rate falls to 2%

The rate of inflation dropped to 2% in May – down from 2.3% in April – reaching the Bank of England’s target to keep rising prices in check.

The figures released by the Office for National Statistics (ONS) this morning brought to an end a three-year battle against soaring prices for consumers. At one point, in October 2022, inflation reached 11.1% against a backdrop of soaring energy prices caused by the war in Ukraine. The 2% figure is the lowest since July 2021.

The fall in inflation is likely to bring about a cut in interest rates, currently stuck at 5.25%, over the summer.

Kris Hamer, director of insight at the British Retail Consortium, said: “The country will breathe a sigh of relief as inflation hits the Bank of England’s target of 2% for the first time in almost three years, raising hopes of an interest rate cut for the 9.6 million mortgage holders across the UK. Falling energy prices continue to be the main driver behind the fall in the headline rate however, a lower inflation rate in clothing and furniture also contributed. Food inflation fell the fourteenth month in a row, and those with a sweet tooth will be happy to see that the price of chocolate and confectionary products fell on the month.

“Hitting the 2% target is welcome news, however, it is vital that inflationary progress is not taken for granted by the next government. Retailers are working hard to limit price increases for their customers, and the next administration must play their part in reducing cost pressures on retailers and the customers they serve. Addressing key costs such as the business rates burden, which leads to customers paying a higher price at the till, must be a priority for whoever forms the next government.”