June 21, 2023 (MLN): British consumer price inflation defied expectations that it would slow and held at 8.7% in May, official figures showed on Wednesday, a day before the Bank of England is forecast to raise interest rates for the 13th time in a row, as Reuters reported.
"We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living," finance minister Jeremy Hunt said.
The Sterling jumped against the U.S. dollar and euro after the figures were released before losing most of its gains.
The ONS said core inflation – a measure that excludes volatile food, energy, alcohol, and tobacco prices, and which the BoE views as a good guide to underlying price pressures – unexpectedly rose to 7.1% from 6.8%, its highest since 1992.
"The cost of airfares rose by more than a year ago and is at a higher level than usual for May," Office for National Statistics chief economist Grant Fitzner said.
"Rising prices for second-hand cars, live music events and computer games also contributed to inflation remaining high."
British inflation has proved more persistent than in other major advanced economies, with headline CPI the highest in the G7, ahead of Italy which recorded a rate of 8% in May.
