The UK economy is unlike most European economies. It has an unemployment rate which is only bettered by Germany and it has no problem with deflation. It was also one of the first countries to get inflation back to within its central bank’s stated target range of 2%-3%.
The annual rate of UK consumer inflation stabilised in May, maintained predominantly by higher fuel prices and other transport costs. Consumer price index (CPI) figures released by the Office of National Statistics (ONS) indicated seasonally-adjusted consumer prices increased by 0.4% over the month, which is more than markets expected but the same as March’s comparable figure. On a 12-month basis, the consumer inflation rate remained unchanged at 2.4% (seasonally adjusted).