LONDON (AP) — UK consumer price inflation remained unchanged at 8.7% on the year to May against expectations of a slight decline, official figures showed on Wednesday, a a move that should see the Bank of England raise the cost of borrowing again .
The Office for National Statistics said higher prices for flights, recreational and cultural goods and services and second-hand cars boosted the rate of inflation, while petrol prices at the pump exerted the strongest downward pressure.
“After last month’s plunge, annual inflation was little changed in May and remains at a historically high level,” said the agency’s chief economist, Grant Fitzner.
Financial markets believe news of the unchanged rate will mean the Bank of England will raise its benchmark interest rate on Thursday from the current 15-year high of 4.5%.
Like other central banks, the bank has aggressively raised borrowing rates over the past 18 or so months after inflation rose sharply, first due to bottlenecks caused by the coronavirus pandemic. coronavirus and then Russia’s invasion of Ukraine, which drove up energy and food prices.