The Consumer Prices Index (CPI) rate of inflation dropped to 2 per cent in May 2019, down from 2.1 per cent in April 2019, hitting the Bank of England’s target rate.

The Office for National Statistics also revealed that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) was 1.9 per cent in May 2019, down from 2 per cent in April.

It said that falling fares for transport services, particularly air fares influenced by the timing of Easter in April, and falling car prices produced the largest downward contributions to the change in the rate between April and May 2019.

However, these were partially offset by rising prices for a range of games, toys and hobbies, furniture and furnishings and accommodation services.

Commenting on the figures, Aegon pensions director, Steven Cameron, said: “Consumers will welcome today’s inflation figure, which should take some pressure off increases to the cost of living. A rate of 2 per cent last month, bang on the Bank of England’s target, will ease the pressure on working household budgets.

“But for those on fixed incomes, like pensioners, it’s dangerous to be complacent as this group are more acutely exposed to inflation eroding their purchasing power. For this group, it’s important to look at underlying drivers behind the headline figure. For example, pensioners spend more of their income on heating costs, which are affected by fuel prices.

“While the labour market remains in a strong position with real wage growth and relatively low inflation, households will be in a good position to plan ahead and save for the future, particularly given the uncertainty of what impact Brexit will have continues to hang over the UK’s economy.”

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