Inflation falls back to 2% target: ONS

CPIH inflation, The ONS' headline measure which includes owner occupiers’ housing costs, was 1.9% in May, down from 2.0% in April.

Falling fares for transport services, particularly air fares influenced by the timing of Easter in April, and falling car prices produced the largest downward contributions to the change in the rate between April and May.

Tom Stevenson, investment director for Personal Investing at Fidelity International, commented: “With the rate of inflation falling back to target in May and other key central banks returning to an easing path, there is no pressure on the Bank of England to move on interest rates tomorrow. The prospect of low rates for the foreseeable future, together with last week’s above-inflation increase in average earnings, means UK households should be feeling more relaxed about their financial prospects than for some time.

“In the thick of a leadership contest - and with Brexit as far from resolution as ever - the Bank will most likely err on the side of caution as we face continuing political and economic uncertainty during the rest of 2019."