Monthly wage growth reports from the Office for National Statistics (ONS)

UK Inflation Hits Bank of England's 2% Target in May for First Time in Nearly Three Years

Jun 19, 2024, 06:41 AM

UK inflation has fallen to the Bank of England's 2% target for the first time in nearly three years. This marks a significant decrease from the peak of 11.2% in October 2022 and 8.7% a year ago. The drop to 2% was recorded in May, down from 2.3% in April. This achievement is seen as a positive development for the UK economy, potentially paving the way for interest-rate cuts later this year. The decline in inflation is attributed to the fading economic effects of the COVID-19 pandemic and Russia's invasion of Ukraine. Despite this progress, prices for essential items such as food, energy, clothing, and rent remain significantly higher than three years ago, and mortgage repayments have doubled. Average wages are now rising three times as fast as prices, having increased by 5.9% in the last year. The fall in inflation is expected to have political implications, with Chancellor Jeremy Hunt and the Conservative Party aiming to capitalize on this achievement ahead of the upcoming general elections. ONS data confirms this milestone.