Record jump in air fares sends UK inflation soaring to 2.7%

Prices rose across European, long-haul and domestic flights

A 22 per cent surge in air fares helped lift inflation higher than expected last month to heap more pressure on households as the rate of consumer price index (CPI) inflation increased to 2.7 per cent in May.

CPI inflation climbed to 2.7 per cent, up from 2.4 per cent in April, the Office for National Statistics (ONS) said.

Stubbornly high inflation was worse than City expectations for a 2.6 per cent rise in prices, and is expected to peak around 3 per cent over the next few months to ensure a summer of pain for households.

Inflation resumed its upward climb in May as air fares leapt 22 per cent from April - the highest rate on record for this time of year - while the rate of price falls for petrol and diesel slowed.

Prices rose across European, long-haul and domestic flights, the ONS said, adding that higher air fares were not necessarily linked to the early timing of the Easter holidays.

Overall transport prices rose by 0.4 per cent between April and May, the ONS said.

The price of clothing and footwear also rose 1.2 per cent month on month to tighten the squeeze on households, as the cost of women's outdoor clothing increased during a colder-than-normal month.

But food and drink prices helped hold back inflation, with price falls for meat, vegetables, fruit, sugar, sweets and jams.

Inflation is expected to surge even higher above the Bank of England's 2% target in the coming months as higher gas, electricity and water bills, plus rising tuition fees, send it to a summer peak.

The figures come ahead of minutes due this week from the Bank's June interest rates meeting - outgoing governor Sir Mervyn King's last meeting - which will reveal the level of support for more economic stimulus.

The Bank's Monetary Policy Committee voted to hold its quantitative easing (QE) programme steady at £375 billion this month, also holding rates at 0.5 per cent, amid signs of improvement in the economy.

The Bank is expected to hold off more QE until the arrival of new governor Mark Carney next month.

Today's figures also showed Retail Prices Index inflation, which includes housing costs, rose to 3.1 per cent in May, from 2.9 per cent in April.

Ratings agency Moody's said: "Ongoing price pressures combined with austerity will squeeze household finances through 2013."

Vicky Redwood, economist at Capital Economics, said that while higher than expected, inflation's peak is "hopefully not too far away now".

She said: "Inflation will probably get above 3 per cent in the next month or two - meaning that one of Mr Carney's first jobs will be to write an explanatory letter to the Chancellor."

The Treasury said inflation is down by almost a half from its peak of 5.2 per cent in 2011.

A spokeswoman said: "To help families with the cost of living, the Government has increased the tax-free personal allowance to £10,000, which will take 2.7 million people out of income tax altogether and save a typical taxpayer over £700.

"(It has) frozen fuel duty which has kept petrol prices 13p per litre lower than they would otherwise have been."

But TUC general secretary Frances O'Grady said Britain is set for a "joyless" recovery.

She said: "Britain's great wage squeeze shows no sign of abating.

"Forty consecutive months of real wage falls means people have less to spend on the high street, and are why economic green shoots are not being felt across the country."

Additional reporting, PA

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
News
news
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
New Articles
i100... with this review
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Sport
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
i100
News
news
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
News
Blahnik says: 'I think I understand the English more than they do themselves'
people
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Marketing Manager - Leicestershire - £35,000

£30000 - £35000 per annum: Ashdown Group: Marketing Manager (CIM, B2B, MS Offi...

Marketing Executive (B2B and B2C) - Rugby, Warwickshire

£22000 - £25000 per annum: Ashdown Group: A highly successful organisation wit...

SEN Coordinator + Teacher (SENCO)

£1 per day: Randstad Education Leeds: Job Purpose To work closely with the he...

Research Manager - Quantitative/Qualitative

£32000 - £42000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam