Key facts
- UK inflation held steady at 2.8% in May, defying economists' forecasts of a rise.
- Higher transport and fuel costs were offset by slower food price increases.
- The US-Iran conflict has contributed to persistent energy price pressures.
- Household inflation expectations for five years ahead reached a record 3.9%.
- The Bank of England is expected to keep interest rates unchanged at 3.75%.
UK inflation unexpectedly remained at 2.8% in May, unchanged from the previous month and below economists' forecasts of a 3.0% rise, according to the Office for National Statistics. Higher transport and fuel costs were offset by slower food price increases. The ongoing US-Iran conflict has contributed to persistent energy price pressures, particularly impacting fuel and chemicals. Household inflation expectations for five years ahead have reached a record high of 3.9%, the highest since data collection began in 2009. The Bank of England's Monetary Policy Committee is widely expected to hold interest rates at 3.75% on Thursday as policymakers assess the impact of the conflict and inflation data. Economists hope an agreement between Donald Trump and the Iranian regime will reopen the Strait of Hormuz, potentially easing price pressures.