UK Inflation Falls In May On Weakened Oil Prices

The underlying rate of UK inflation fell to 2.9% in May, down by 0.1% on the previous month, according to the latest figures from the Office Of National Statistics (ONS).

The headline rate of inflation, which includes mortgage interest payments also fell by 0.1% to 3%. However, it still remains well above the Government’s target of 2.5%.

The ONS has attributed the declining rate of inflation to a big drop in oil and petrol prices in the aftermath of the Iraq war. Weakening of the UK housing market and the falling cost of foreign travel also added to the downward pressure. However, upward pressure was provided by housing costs, in particular the increase in council tax.

The all items Retail Prices Index for May 2003 was 181.5.

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