UK inflation eases slightly to 3.4%

The rate of Consumer Prices Index inflation fell to 3.4% in May from 3.5% in April, the Office for National Statistics (ONS) has said. The single percentage point drop will likely come as a disappointment to Chancellor Rachel Reeves and the Labour Government, which has pledged to put more money into people's pockets.

May's inflation rate of 3.4% is well above the Bank of England's 2% target, though the Government and Threadneedle Street expect this to fall further over the summer months. Ms Reeves said in a statement: "Our number one mission is to put more money in the pockets of working people through our Plan for Change.

"We took the necessary choices to stabilise the public finances and get inflation under control after the double digit increases we saw under the previous government, but we know there’s more to do. Last week we extended the £3 bus fare cap, funded free school meals for over half a million more children, and are delivering our plans for free breakfast clubs for every child in the country.

"This Government is investing in Britain’s renewal to make working people better off."

The latest inflation reading comes a day before the Bank of England's Monetary Policy Committee announces whether it will cut, hold or raise interest rates. Rate-setters are expected to keep base rate at 4.25%.

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