{"id":122607,"date":"2026-07-05T13:25:00","date_gmt":"2026-07-05T12:25:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=122607"},"modified":"2026-07-05T12:52:31","modified_gmt":"2026-07-05T11:52:31","slug":"inflation-holds-firm-food-energy-wages","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/inflation-holds-firm-food-energy-wages\/","title":{"rendered":"Inflation Holds Firm in the UK as Food, Energy and Wages Pull in Different Directions"},"content":{"rendered":"\n

The data comes as policymakers continue to weigh persistent price pressures against signs of a weakening labour market<\/strong>. While recent developments in global energy markets have eased some immediate concerns, uncertainty over future inflation remains.<\/p>\n\n\n\n

The Office for National Statistics reported that the Consumer Prices Index (CPI) rose by 2.8% in the 12 months to May, matching the annual rate recorded in April. Economists had expected inflation to edge up to 3%, reflecting concerns that the conflict involving Iran would feed through into consumer prices.<\/p>\n\n\n\n

Food Prices Ease While Energy Remains a Source of Uncertainty<\/strong><\/h2>\n\n\n\n

According to the Office for National Statistics, the unchanged inflation rate was largely explained by a slowdown in food price inflation, which fell from 3% in April to 2.2% in May. The rate of price increases for bread, meat, pasta and vegetables all declined compared with the previous year.<\/p>\n\n\n\n

The Agriculture and Horticulture Development Board (AHDB<\/a>) said British households are currently buying less beef <\/strong>because of affordability pressures. At the same time, fewer cattle are being slaughtered, although heavier carcasses have contributed to an oversupply. According to the Office for National Statistics, beef and veal prices were still 9.3% higher than a year earlier, although that increase was lower than the rises of up to 27% recorded in previous months.<\/p>\n\n\n\n

The figures also reflect recent movements in household energy costs. A reduction in the government’s energy <\/strong>price cap between April and June lowered annual bills for a typical household by \u00a3117, contributing to weaker inflation in April. A higher price cap is expected to take effect from 1 July, reflecting increased wholesale energy costs.<\/p>\n\n\n\n

The conflict in the Middle East had prompted expectations of stronger inflationary pressure through higher oil prices<\/strong>. Following the recent peace agreement between the United States and Iran, oil prices fell sharply, reducing expectations that inflation would rise as much as previously forecast. Analysts nevertheless warned that renewed disruption could reverse that trend.<\/p>\n\n\n\n

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Of businesses in late June 2026:

\u00b7 64% reported some degree of concern about energy prices,\u202fbroadly stable with early June
\u00b7 68% expressed some degree of concern for fuel prices, down 2\u202fpercentage points\u202ffrom\u202fearly June

Read more \u27a1\ufe0f https:\/\/t.co\/LqbFbHSkPa<\/a> pic.twitter.com\/Zud7RVuK6x<\/a><\/p>— Office for National Statistics (ONS) (@ONS) July 2, 2026<\/a><\/blockquote>