The Bank of England spent its April report warning that inflation could climb above 3.5% later this year, driven by energy price shocks from Middle East geopolitical tensions. The actual number for May? A flat 2.8%, unchanged from April and below the 3.0% economists had penciled in.
The numbers tell a calmer story than expected
UK Consumer Price Index inflation came in at 2.8% year-over-year for May 2026. That figure held steady from April’s reading, refusing to budge upward despite widespread expectations that energy cost pass-throughs would start biting consumers harder.
Economists had broadly expected the number to tick up to around 3.0%. The Bank of England’s own April 2026 Monetary Policy Report painted an even more aggressive picture, projecting that inflation could exceed 3.5% as the year progressed.
Instead, core inflation measures are showing moderation. Service sector inflation pressures, often the stickiest component of the UK’s price basket, are easing. That points to subdued domestic demand rather than some temporary statistical quirk.
