By Ed Frankl


U.K. inflation was unchanged in May, although higher energy costs continued to drive price pressures, ahead of a Bank of England meeting this week at which policymakers are expected to keep interest rates on hold.

The annual rate of inflation came in at 2.8%, the same as in April, the Office for National Statistics said Wednesday. A consensus of economists polled last week by The Wall Street Journal expected May's rate to pick up to 3.0%.

Energy prices continued to put upward pressure on the rate, with motor fuel costs up 25% compared with May 2025. Air fares rose by 10.3% between April and May, the ONS said. But services prices also saw a substantial pickup, potentially a sign that higher energy costs are leaking into other areas of the economy.

A 13% rise in home-energy prices due from July suggests pressures will linger even after a deal was announced between the U.S. and Iran to reopen the Strait of Hormuz.

Policymakers at the BOE will be particularly attentive to broader inflationary pressures outside energy, given they may drive stronger wage demands that could force firms to raise prices, and prompt further price increases. However, investors expect the bank to hold its key rate at 3.75% on Thursday.


Write to Ed Frankl at edward.frankl@wsj.com


(END) Dow Jones Newswires

06-17-26 0232ET