UK CPI inflation was unchanged at 2.8% YoY in May, with prices rising 0.2% MoM for a second straight year-over-year comparison. The headline rate remained stable as rising transport costs were largely offset by easing food inflation.

• Transport inflation accelerated sharply to 6.8% YoY from 4.5% YoY, reaching its highest level since December 2022. Higher airfares, motor fuel prices, and sea fares were the main drivers, with motor fuel inflation rising to 24.6% YoY.
• Food and non-alcoholic beverage inflation slowed to 2.2% YoY from 3.0% YoY and prices fell -0.1% MoM, marking the lowest annual food inflation rate since December 2024.
• Underlying inflation pressures were more mixed. Core CPI rose to 2.6% YoY from 2.5% YoY, while services inflation accelerated to 3.7% YoY from 3.2% YoY. At the same time, goods inflation slowed to 2.0% YoY from 2.4% YoY, suggesting inflation pressures are increasingly concentrated in services rather than goods.
• The report points to a stable headline inflation picture, but firmer services and transport inflation indicate that underlying price pressures remain elevated even as food inflation continues to cool.