Inflation Remains Steady and Pushes Possibility of Greater Rate Hike by MPC

In a less than favorable report, this morning, the Office of National Statistics (ONS) released the data on inflation. The Consumer Prices Index (CPI) had been expected to drop to at least 8.4%, but it remained at 8.7% for May, the same as was reported in April. While inflation has dropped from the peak level of 11.1% reported in October 2022, it remains over four times the target rate of 2.0% set by the Bank of England. The higher than expected inflation level adds more pressure to the Monetary Policy Committee (MPC) as they seek to balance the threat of inflation and the financial woes of households facing higher mortgage payments.