LONDON: British consumer price inflation was unchanged at 8.7% in May compared to April’s data, contrary to expectations for a slight fall, figures from the Office for National Statistics showed on Wednesday.
Economists polled by Reuters had forecast that the annual CPI rate would drop to 8.4% in May, moving further away from October’s 41-year high of 11.1%.
Core inflation - a measure which excludes volatile food, energy, alcohol and tobacco prices, and which the Bank of England views as a good guide to underlying price pressures - rose to 7.1% from 6.8%.
Economists polled by Reuters had expected the measure to remain at the 30-year high it struck in April.
British inflation has proved more persistent than in other major advanced economies, with headline CPI the highest in the G7, just ahead of Italy which recorded a rate of 8.0% in May.
The BoE is widely expected to raise interest rates for a 13th time in a row on Thursday to 4.75% from 4.5%.
Before Wednesday’s data, markets had ramped up their expectations for the peak in BoE rates to as high as 6% by early 2024.
Britain’s high inflation rate is also a problem for Prime Minister Rishi Sunak who has promised to halve the pace of price growth by the end of 2023 before an expected national election in 2024.
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