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Consumer Prices Index annual inflation falls

Consumer Prices Index (CPI) annual inflation fell by 2.2% in May, down from 2.3% in April, according to a report from the Office for National Statistics released today.

The largest downward pressure on CPI inflation came from food and non-alcoholic beverages, owing in part to meat prices rising by less than a year ago. Housing and household services also contributed to the decline, owing mainly to electricity bills, where tariffs fell this year, the report states.

Upward pressure came from alcoholic beverages and tobacco, reflecting the increase in excise duty on these goods in this year’s budget. Last year this effect was seen in April.

Annual inflation measured by the Retail Prices Index (RPI), which includes housing costs such as mortgage interest payments and council tax, was down 1.1% in May, compared with a 1.2% fall in April.

The main factors affecting the CPI also affected the RPI, although upward pressure from housing-related costs had more of an impact on the latter. The government’s target inflation rate is 2%, based on the CPI measure.

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