skip to main content

Transport costs drive UK prices up

Oil prices - Factor in UK inflation
Oil prices - Factor in UK inflation

Britain's inflation rate rose to its highest level in over a year in May as high oil prices pushed up transport costs.

The Office for National Statistics said the rate of consumer price inflation rose to 1.5% in May, a figure likely to reinforce the Bank of England's belief that medium-term inflation pressures are building up.

But the number, which was in line with economists' expectations, is still well below the BoE's government-set target of 2% inflation.

The largest upward effect on the annual rate came from transport, which was mainly due to higher fuel and lubricant costs, after oil prices hit near-record levels in May. The average unleaded petrol price rose to 82p a litre in May from 78p in April, the ONS said.

The Retail Price Index, which includes a housing component, rose at an annual rate of 2.8%, on the back of rising oil prices and higher housing costs.