UK inflation holds at one-year low in May

British inflation unexpectedly stuck at a one-year low in May, though rising oil prices suggest a modest increase could be on its way, leaving the outlook for Bank of England interest rates finely balanced.

Consumer price inflation held at 2.4 per cent in the last month, its joint-lowest annual rate since March 2017, the Office for National Statistics said on Wednesday.

Inflation hit a five-year high of 3.1 per cent in November, when the effect of the pound’s tumble after June 2016’s Brexit vote reached its peak, reports Reuters.

The BoE said last month it expected inflation to pick up again a bit in the coming months due to higher oil prices and energy bills, before resuming a steady decline towards its 2.0 per cent target.