UK inflation slowdown unlikely to shift vote, rate outcomes

LONDON: Britain’s inflation rate has slowed to a near three-year low, official data showed Wednesday, but the boost for embattled Prime Minister Rishi Sunak was unlikely to prevent his Conservatives from losing the upcoming general election to Labour, analysts said.

The Consumer Prices Index decelerated to 2.0 percent in May from 2.3 percent in April, the Office for National Statistics said in a statement citing easing growth in food prices.

UK inflation last stood at the Bank of England’s 2.0-percent target in July 2021, before rocketing higher in a cost-of-living crisis fuelled largely by soaring energy and food bills.

The BoE will announce its latest monetary policy decision on Thursday but is expected to stand pat on interest rates, as is customary so close to a UK general election. Irrespective of the election, analysts added that the central bank would likely hold fire with prices still rising on top of sharp increases seen in recent years.

It comes as shoppers remain plagued by shrinkflation where companies slash the size of products yet charge the same or even more.

Wednesday’s data was unlikely to move the dial on Sunak’s struggling election campaign in the runup to the July 4 vote, analysts remarked.