The annual CPI figures for the UK showed a fall from 3.0% in April 2012 to 2.8% in May, the lowest inflation rate since November 2009.
The ONS reports that the largest downward pressure on the CPI inflation rate during May was lower fuel prices and the price of non-alcoholic drinks, with the most significant upward pressure coming from air and sea transport costs. The timing of Easter also caused upward pressure during May.
This represents the second consecutive month that the Governor of the Bank of England, Sir Mervin King, has not had to write an open letter to the Chancellor explaining what inflation has not been within its target range of 2% +/- 1%, and provides some welcome news for the UK Chancellor. RPI inflation is also down, from 3.5% to 3.1%.
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