Inflation in Britain eased last month, but remained well above the Bank of England's target rate, according to figures published this morning. Retail prices excluding mortgage interest payments (RPI-X), the central bank's preferred measure of inflation, rose 0.1pc in May from April and were up 2.9pc year-on-year, National Statistics said. The Bank of England has an inflation target rate of 2.5pc. The headline retail price index rose 0.2pc in May from the previous month for a 3.0pc year-on-year increase. The rise in the RPI-X was smaller than expected.
The largest downward effect came from motoring expenditure as increases in OPEC production led to lower oil and petrol prices this year, in contrast with shortages and large price rises a year ago. Oil price changes also led to a large downward effect from fuel and light, where price decreases for domestic fuel oil contrasted with increases a year ago. Leisure services also contributed a large downward effect, reflecting declines in the costs of UK and foreign holidays. The largest upward influence came from housing costs after council tax bills rose this year. //www.fxcentre.com