On a monthly basis, CPI rose by 0.3 per cent in May compared with a rise of 0.7 per cent in May last year.

The largest downward contribution to the monthly change in CPI annual rates came from food; the largest upward contribution came from motor fuels.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.5 per cent in the 12 months to May, down from 3.9 per cent in April.

The CPI goods annual rate fell from minus 0.8 per cent to minus 1.3 per cent.

Producer input prices in the country fell by 0.1 per cent in the year to May, up from a revised fall of 1.4 per cent in the year to April.

Producer output (factory gate) prices rose by 1.7 per cent in the year to May, up from an increase of 1.1 per cent in the year to April.

On a monthly basis, producer input prices showed no movement, while output prices fell by 0.1 per cent in May this year.

The annual inflation rates for both input and output producer price indices (PPI) are at their highest levels since May 2023, based on provisional data.

Kris Hamer, Director of Insight of the British Retail Consortium, said: “The country will breathe a sigh of relief as inflation hits the Bank of England’s target of 2 per cent 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.

“Hitting the 2 per cent 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.”

Fibre2Fashion News Desk (DS)