PwC comments on ONS CPI data - June 2026

Commenting on the latest Office of National Statistics Consumer Price Index May 2026 data, Adam Deasy, Economist at PwC UK, says:

“May’s CPI inflation surprised again, staying flat at 2.8% against expectations of a small increase. While roughly half of April’s large drop in services inflation was undone amidst a significant increase in transport prices, offsetting broad-based negative contributions in most categories kept the overall inflation rate constant.

“That includes food prices, which had the lowest rate of annual increase since December 2024 and constituted the largest downward driver of prices. Many expected budding price pressures here, which may yet still materialise later in the year, a reminder that the size and timing of pass-throughs from complex global shocks is unpredictable and uncertain.

“Looking forward, the potential peace agreement in the Middle East has taken some immediate heat out of oil markets, with large drops in crude oil prices on announcement. But it has not removed the risk of higher costs feeding through later in the year, and this respite is still dependent on what have previously shown to be fragile negotiations.

“In particular, the deal won’t be signed by the time the Bank of England meets tomorrow, with ships still unable to traverse the Strait of Hormuz; that’s one good reason why their ‘wait-and-see’ approach is likely to continue. Compared to their European counterparts, who hiked interest rates by 25bps last week, the Monetary Policy Committee’s more cautious approach may be prudent, should peace hold, growth beyond Q1 stay subdued, and inflationary pressures continue to moderate.”