UK inflation rate rises to 2.9%

PanARMENIAN.Net - The UK inflation rate rose to 2.9% in May, up from 2.7% the previous month, official figures show, according to BBC News.

It is the highest rate since June 2013 and keeps inflation above the Bank of England's 2% target.

The Office for National Statistics said one of the main reasons for the rise was the cost of foreign package holidays for British tourists.

Another factor was the price of computer games and equipment, which are usually imported.

They are part of the recreational and cultural goods and services sector, where prices rose overall by 0.9% between April and May compared with a fall of 0.4% a year ago.

Food and clothing also went up in price slightly after falling 12 months ago, with the sugar, jam, confectionery and children's clothing markets mainly responsible.

There were also rises in the cost of furniture and household goods, and electricity, with further price increases coming into effect in May.

However, these were offset slightly by a third successive month of falls in the price of petrol and diesel and also in the cost of air and sea travel, which was influenced by Easter falling in April instead of March as in 2016.

The pick-up in inflation is likely to continue the squeeze on consumers, with prices rising faster than increases in wages.

The most recent ONS data on wages found that average weekly earnings excluding bonuses increased by 2.1% in the three months to March. Figures for the three months to April will be released on Wednesday.

On Monday, June 12, a survey by credit card firm Visa said household spending dropped for the first time in four years last month.

The ONS's new preferred measure of inflation CPIH - which includes a measure of owner occupiers' housing costs - rose to 2.7% last month, up from 2.6% in April.

The Retail Prices Index (RPI) measure of inflation increased to 3.7% in June, up from 3.5% the month before.