Inflation has hit the Bank of England’s target for the first time in almost three years.<\/p>\n
Prices rose at 2% in the year to May, down from 2.3% the month before, official figures show.<\/p>\n
The economy is a key talking point in the run-up to the general election on 4 July, with all of the main parties debating how they would keep the cost of living under control.<\/p>\n
It comes ahead of a Bank of England decision on UK interest rates this Thursday.<\/p>\n<\/div>\n
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The bank is expected to hold the rate at 5.25% for the seventh meeting in a row, with markets not betting on a cut until August. <\/p>\n
The drop in May’s figure was driven by a slowdown in price rises for food and soft drinks, recreation and culture, and furniture and household goods.<\/p>\n
Inflation hit 11.1% – its highest level in over 40 years – in October 2022 as energy and food prices surged due to Russia’s invasion of Ukraine. <\/p>\n
May’s figures are the last big official economic statistics of the general election campaign and will be sure to spark a significant debate among the main parties.<\/p>\n
The Conservatives will hope the figures can help its story of an economic turnaround.<\/p>\n
Labour will continue to press concerns about an ongoing cost of living crisis.<\/p>\n
Food prices are still 25% higher than at the beginning of 2022 and petrol prices are now on the way up again.<\/p>\n<\/div>\n\n\n
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‘You can’t pass all costs onto customers’<\/h2>\n<\/p>\n\n\n
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Gary Wildman, the owner of John Wildman & Sons butchers, told the BBC he had seen price rises levelling out at the store he started with his dad 31 years ago in Rusington, West Sussex.<\/p>\n
“Prices are probably 10 to 15% more than they were at the beginning of Covid, but they are level now, definitely,” he told the BBC.<\/p>\n
However, he said some products such as pork were still going up while the shop’s energy bills were higher than a few years ago. <\/p>\n
“You do take a hit to your margins,” he said. “You can’t pass all costs onto customers or the customers wouldn’t come in.” <\/p>\n<\/div>\n
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UK inflation is now rising at its slowest pace since July 2021. <\/b><\/p>\n
It is also lower than in the eurozone and the US, where rates in May were 2.6% and 3.3% respectively.<\/p>\n
Italy is now the only G7 advanced economy to have lower inflation than the UK.<\/p>\n<\/div>\n<\/div>\n