The UK Consumer Price Index (CPI) rose 9.1% year-on-year in May, meeting market expectations and exceeding 9% in April. This is the highest inflation rate recorded since the series began for National Statistic in January 1997. Prior to this series, the data would be the highest seen since 1982.
The monthly CPI stood at 0.7%, above the estimated 0.6% and below the 2.5% of the previous month, thus registering its lowest level in three months. The increase in the prices of food and non-alcoholic beverages made the largest contribution to the increase in monthly rates in May 2022. In May 2021, the main contributions to the increase in monthly rates came from clothing and footwear, and leisure and culture.
Annual core inflation has fallen three tenths, from 6.2% to 5.9%, standing slightly below market expectations, which expected 6%.
GBP/USD reaction
The pound has reacted to the inflation data against the dollar with an initial bounce of around 25 pips which has taken it to a new two-day level at 1.2213. At the time of writing, the GBP/USD It trades above 1.2228, losing 0.36% on the day.
Source: Fx Street
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