The office for National Statistics said on Wednesday that inflation in the UK fell to the Bank of England's target of 2.0% in May, and this data is the last major economic measure before the national elections next July, which will be held precisely on July 4, and opinion polls indicate a landslide victory for the opposition Labor Party.
Core inflation excluding energy, food and alcohol also fell to 3.5% from 3.9% in April.
The office for National Statistics said falling food prices were the biggest contributor to the declines, while car fuel costs continued to put upward pressure.
It is worth mentioning that the Bank of England will meet on Thursday to issue its decision on the interest rate and provide its forecasts on the future path of inflation, and it is widely expected that the bank will keep interest rates steady at 5.25%, as interest rates have been fluctuating at these levels since August last year 2023, at which time inflation was hovering around 7% levels.
With inflation now almost at the target, the markets now do not expect a cut in interest rates this meeting, but rather expectations that the cut will be in August or September next.
