UK inflation jumps to 2.7% in May

UK CPI inflation rose from 2.4% to 2.7% in May, according to the Office for National Statistics, a larger than expected rise driven by transport and clothing costs.

The rise takes the headline inflation rate back to levels seen between October 2012 and March 2013, erasing the drop to 2.4% seen last month. Economists had expected a rise back up to 2.6%. RPI inflation rose as expected from 2.9% to 3.1% on the month, while the core rate of inflation rose from 2% to 2.2%. The largest upwards contributions came from transport, particularly air transport and motor fuel, as well as clothing. The largest downward contributor, meanwhile, came from food. Capital Economics' chief UK economist Vicky Redwood said the rise "should not prevent [incoming B...