UK Inflation Slows Again to 1.5 Percent

UK Inflation Slows Again to 1.5 Percent

Britain’s 12-month inflation slowed to 1.5 percent in May, which was the lowest level for four and a half years, official data showed on Tuesday.

Although Britain is not in the eurozone, the unusually low trend for 12-month inflation shadows even lower inflation in the 18-member single currency area.

That has pushed the European Central Bank into exceptional measures to try to push money through the economy and support prices and ward off the threat of deflation.

However, in Britain, there is now talk that the central bank, the Bank of England, may have to raise rates to slow down overheating, mainly in the property market.

The Consumer Prices Index (CPI) inflation measure ticked down to 1.5 percent in May from 1.8 percent in April, the Office for National Statistics (ONS) said in a statement.

“Falls in transport services costs, notably air fares, provided the largest contribution to the decrease in the rate,” the ONS said.

“Other large downward effects came from the food and non-alcoholic drinks and clothing sectors.”

The CPI rate last stood at 1.5 percent in October 2009, and was last seen lower in September 2009 at 1.1 percent.

The latest figures mark the sixth month in a row when the rate has been at or below the Bank of England’s 2.0-percent target, the first time this has happened since 2009.