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UK CPI inflation was back to the Bank of England target of 2% in May, as food prices fell back during the month compared to a rapid rise a year ago.
CPI fell back to 2% in the 12 months to May, down from 2.3% in the 12 months to April, according to the Office of National Statistics.
On a monthly basis, CPI rose by 0.3% in May 2024, compared with a rise of 0.7% in May 2023.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 2.8% in May, down from 3% in April.
The ONS said the largest downward contribution to easing inflation came from food, with prices falling this year but rising a year ago.
Food prices fell 0.3% on a one-month basis in May, compared to an annual rise of 1.7% in the year to May and a 2.9% annual rise in the year to April.
The May figure is the lowest annual rate since October 2021. The rate has eased for the 14th consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.
The main downward effects came from a combination of bread and cereals, vegetables, and sugar, jam, syrups, chocolate and confectionery. In each case, prices fell between April and May this year, compared with a monthly rise a year ago.
The resulting annual rates were the lowest since October 2021 for the first two categories and since June 2022 for sugar, jam, syrups, chocolate and confectionery.
The ONS notes food prices remain “relatively high” but have been stable since early summer 2023, compared with sharp rises over the previous 12 months.
Overall inflation was also eased by weaker inflation in the recreation and culture, and furniture and household goods sectors.
The largest upward input into inflation came from motor fuels, with prices rising slightly this year but falling a year ago.
Morning update
Pub group Young’s continued its bounceback from the pandemic, posting revenue growth of 7.4% to £388.8m and higher profits.
On a like-for like 52-week basis sales were 3.4% against strong results in 2023, in line with historical trends.
Young’s exceeded pre-pandemic profit levels last financial year and further accelerated performance with a profit before tax of £49.4m, an increase of 9.1%.
Young’s said it also had “sector-leading margin” of 14.7%, up 50 bps on last year.
Adjusted EBITDA was up 7.8% to £92.2m.
CEO Simon Dodd commented: “In a landmark year for Young’s, we have reported another excellent financial performance with industry leading profitability. This is once again testament to the excellent work and energy of our teams and our proven strategy of operating premium, individual, differentiated and well-invested pubs and bedrooms.
“Looking ahead, we face some challenges, but there is plenty for us to be excited about this year. We are heading into a feast of summer sporting events, starting with Euro 24, Wimbledon and the Olympics.
“Our belief in Young’s long-term growth potential remains as good as ever, and we are confident of our performance in the year ahead.”
Yesterday in the City
The FTSE 100 fell back 0.2% yesterday to 8,172.4pts.
Fallers included PayPoint, down 2.2% to 626p, Coca-Cola Europacific Partners, down 1.7% to €67.80, THG, down 1.4% to 62.8p and Virging Wines, down 1.1% to 46p.
Risers yesterday included Greencore, up 3.9% to 165.8p despite its recent product recalls, McBride, up 2.4% to 127.5p, Domino’s Pizza Group, up 2.4% to 323.2p, Kerry Group, up 2.2% to €77.80, Naked Wines, up 2.2% to 61.5p and Nichols, up 2.1% to 992p.
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