Inflation easing but still above BoE 2% target

The consumer price index (CPI) of inflation eased in May to 3.4%, down from 3.7% in April, according to the Office for National Statistics (ONS).

Lower oil prices and last year's hike in tobacco and alcohol prices contributed to the fall. However, inflation is still above the Bank of England's official 2% target, requiring Bank of England governor Mervyn King to write an open letter to Chancellor George Osborne. The ONS says the only upward pressure on CPI came from household and household services. The retail price index (RPI) - a wider measure of inflation used for wage negotiations - fell to 5.1% in the year to May, down from 5.3% in April. The ONS attributed the decrease to the same factors which affected CPI. The inf...