CBI responds to inflation figures for May 2024

Martin Sartorius, Principal Economist, CBI said: 

"Another fall in inflation in May will come as welcome news to households as we move towards a more benign inflationary environment. However, many will still be feeling the pinch due to the level of prices being far higher than in previous years, particularly for food and energy bills.

"Today’s data sets the stage for the Monetary Policy Committee to cut interest rates in August, in line with our latest forecast’s expectations. However, rate-setters will still need to weigh the fall in headline inflation against signs that domestic price pressures, such as elevated pay growth, are proving slower to come down. This means that they are likely to move cautiously beyond August to avoid putting further upward pressure on inflation, especially as the growth outlook improves at home and geopolitical tensions remain heightened."