UK inflation is set to have slowed last month as prices settled following “awful April” bill rises, economists have suggested.
The rate of Consumer Prices Index (CPI) inflation is expected to have fallen to 3.3% in May, from 3.5% in April, according to a consensus of analysts.
Since releasing the data, the Office for National Statistics (ONS) said that an error in vehicle tax data collected meant April’s CPI rate should have been 3.4% – but that it was not revising the official figure.
A decline would mean prices were still rising in May, but at a slower rate than in April when a raft of bills increased for households up and down the country.
The energy price cap, set by regulator Ofgem, rose by 6.4% in April, resulting in bills for a typical household rising by £9.25 a month.
Steep increases to water charges, and rises for council tax, mobile and broadband tariffs, and TV licences were among those to take effect.
This means that economists are expecting price rises to have settled in May, resulting in a slowdown in the overall inflation rate.
Meanwhile, Sanjay Raja, senior economist for Deutsche Bank, said he was expecting inflation across transport services to have eased last month following a jump during the Easter holidays in April.
He forecast a fall in the price of airfares in May, compared with April, as well as some train and coach travel costs, while package holiday prices are also set to retreat following a monthly rise.
On the other hand, Mr Sanjay said food inflation is set to “pick up steam” in May, particularly due to rising fresh food prices, while he is also anticipating increases to clothing and furniture prices following Easter sales.
Meanwhile, oil prices have been rising in recent days since Israel launched an attack on Iran’s nuclear programme, raising concerns that the supply of crude from the Middle East could be disrupted.
Rising oil prices could threaten to push up inflation in the UK. Energy costs coming down has been one of the biggest contributors to overall inflation falling from the peaks hit during the cost-of-living crisis.
The ONS will publish its latest inflation data on Wednesday.
