UK inflation dropped to 3.4% in May, down from April's 3.5%, following a correction in car tax data which had previously overstated figures. This revision positioned transport as a significant factor in reducing price growth. With inflation still notably exceeding the Bank of England's 2% goal, driven by persistent increases in labor and energy costs, the latest data bolsters the rationale for keeping interest rates steady at the forthcoming Monetary Policy Committee meeting, emphasizing the balance between inflation control and economic support.
UK inflation fell to 3.4% in May from 3.5% in April, with corrections in car tax data affecting the previous figures.
Despite the drop in inflation, it remains above the Bank of England's 2% target, primarily driven by rising labour costs and energy prices.
The adjustment in the inflation figure highlights transport as the key contributor to the decline in price growth, reflecting data integrity issues.
The current inflation data strengthens the argument for the Bank of England to maintain interest rates during the upcoming Monetary Policy Committee meeting.
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