Inflation steady at 2.8% as transport costs offset food

What's happened

ONS data show May inflation at 2.8%—unchanged from April. Transport costs and petrol push prices up, while food and heating oil weigh on inflation. Bank of England rate path uncertain as markets weigh Middle East tensions and oil prices.

What's behind the headline?

Market context

• Inflation has held at 2.8% in May, the same as April, defying some forecasts of a rise.
• Transport costs, including airfares and petrol, are the main upward drivers; food and drink inflation has eased.
• The Iran conflict continues to shape energy markets, but the effect on overall inflation remains dampened by energy-price caps.

What this means for households

• Gas and electricity bills are under pressure from global energy moves, even as the domestic cap supports household energy costs.
• Petrol and travel costs will continue to weigh on budgets, especially for commuting and holidays.

Policy implications

• The Bank of England faces a data-dependent path; rate decisions will hinge on whether inflationary pressures persist into the summer and how oil prices evolve.

How we got here

ONS data for May show inflation at 2.8%, matching April. Fuel costs and airfares push up transport inflation, offset by softer food prices. Energy price cap cuts have kept household bills subdued, while Iran-related tensions and oil price movements influence expectations for future inflation.

Our analysis

Independent Business quotes ONS chief economist Grant Fitzner noting offsetting price movements; The Guardian and The Scotsman reference the Bank of England’s rate decision as investors weigh whether to hike. All identify transport costs as the main pressure, with food relief and energy caps providing offset.

Go deeper

• Will inflation stay at 2.8% in June?
• How will BoE policy react if transport costs keep rising?
• What happens to energy prices if Middle East tensions ease?

More on these topics

• Office for National Statistics

  The Office for National Statistics is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the UK Parliament.

• Bank of England - Bank in London, England

  The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based.

• United Kingdom - Country in Europe

  The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the north­western coast of the European mainland.

• Iran (Islamic Republic of Iran) - Country in the Middle East

  Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. It is bordered to the northwest by Armenia and Azerbaijan, to the north by the Caspian Sea, to the northeast by Turkmenistan, to the east by Afghanistan a

• Rachel Reeves - Member of Parliament of the United Kingdom

  Rachel Jane Reeves is a British Labour Party politician serving as Shadow Chancellor of the Duchy of Lancaster and Shadow Minister for the Cabinet Office since 2020. She has been the Member of Parliament for Leeds West since 2010.

• Russia - Country

  Russia, or the Russian Federation, is a transcontinental country located in Eastern Europe and Northern Asia. Covering an area of 17,125,200 square kilometres, it is the largest country in the world by area, spanning more than one-eighth of the Earth's in

• Middle East - Region

  The Middle East is a transcontinental region that generally includes Western Asia, all of Egypt, Iran, and Turkey. Soviet Central Asia, Afghanistan, and Pakistan are generally excluded.