By Ed Frankl
U.K. inflation cooled a little in May but remained well above the Bank of England's target, with the rise in oil prices prompted by the conflict between Israel and Iran threatening to keep inflation higher for longer.
Consumer prices rose 3.4% in May compared with a year earlier, down from the 3.5% of April, the U.K.'s Office for National Statistics said Wednesday. That matched expectations from a consensus of economists polled by The Wall Street Journal.
The small decline in annual inflation in May is unlikely to move the dial for BOE rate setters, who are expected to leave their policy rate at 4.25% Thursday. Investors anticipate a quarter-point cut when the central bank next meets in August, according to LSEG data.
The BOE expects inflation to cool toward the end of the year, and reach its target in early 2027. But that could change if oil prices continue to rise, after an increase of around 8% since Israel's first strikes against Iran.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
06-18-25 0226ET
