Good news as May inflation unexpectedly holds steady at 2.8 per cent – but even better news as energy prices tumble 17 June 2026 Confounding market expectations of a jump to 3 per cent, UK CPI inflation held at 2.8 per cent in May – but recent welcome falls in energy prices suggest a lower path for inflation in the months ahead, the Resolution Foundation said today (Wednesday). Inflation had been expected to jump in May, largely reflecting earlier falls in airfares and an error in the recording of Vehicle Excise Duty dropping out of the twelve-month calculation. In the event, although both of those factors pushed up on inflation, rises in airfares were smaller than expected and both were balanced out by a welcome, small fall in food prices from April to May. Food inflation was 2.2 per cent in May, well below the Bank of England forecast of 3.5 per cent. There has been even better news for families as optimism about a peace deal in the Middle East has led to sharp falls in energy prices. Brent crude has fallen from over $130 per barrel at the start of April to under $80 per barrel in recent days, bringing prices close to pre-war levels. There have also been large falls in wholesale gas prices. This is most welcome for families struggling with the cost of essentials as it suggests lower than expected energy prices this winter. It is also good news for mortgagors as lower inflation reduces the need for the Bank of England to raise rates. James Smith, Chief Economist at the Resolution Foundation, said: “There was good news on inflation this morning as the rise expected in May failed to materialise and there was an unexpected fall in food prices. “The even better news is that signs of peace in the Middle East mean that energy prices have tumbled. This likely reduces pressures on struggling families this winter and reduces the likelihood of rate rises from the Bank of England.”
