Inflation Holds Steady for May 2018

Published / Last Updated on 13/06/2018

Inflation April 2018Inflation Holds to 2.4 Per Cent.

The Office for National Statistics has released inflation figures for May 2018 with headline CPI inflation holding firm at 2.4% pa yet the old measure of inflation, RPI, falling marginally from 3.4% pa back to its March level at 3.3% pa.

Inflation + Housing Costs CPIH

The Consumer Prices Index including owner occupiers’ housing costs 12-month inflation rate fell held at 2.3% pa.  This is known as CPIH and a benchmark we believe that now includes owner occupier housing costs as mortgage interest rates are low.  This is not CPI but CPIH.

Consumer Prices Inflation CPI

The Consumer Prices Index (CPI) held at 2.4% pa.  This is a key Bank of England (BoE) number and relieves pressure on the Bank of England to increase interest rates.

Retails Prices Index (RPI) – the old measure of inflation

RPI fell back from 3.4% pa to 3.3% pa.  Although this is no longer an official 'National Statistic', it certainly releaves a little pressure on the Bank of England to increase interest rates and strengthen the £ as imported food, goods and games price increases have slowed a little although fuel prices have risen.


The Office for National Statistics suggests that the decrease was due to prices falling for air travel, food and games.  The £pound weakened with lower inflation last month as the threat of interest rate increases reduced and Brexit tensions rising.  That said, for June and July, with weaker pound, food and travel costs will again rise, meaning we expect both RPI and CPI to increase this month and next. A weaker pound has driven stock markets up but we expect, and indeed it started today, for stocks to rise marginally.   If interest rates do increase next soon it will hit stock markets.