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UK inflation returns to positive


The UKs inflation rate has returned to positive in May after one month of negative inflation, official figures have shown.

Inflation rose to 0.1% in May, up from -0.1% in April, according to the Office of National Statistics (ONS). The biggest contributor to this was the cost of transport, in particular air fares, as people book their summer holidays. When inflation dropped in April, it was partly to do with the drop in air and sea fares.

The prices of food and fuel rose from April to May, but are still lower than they were last year. Petrol prices have also stabilised in the past few months after a steep drop.

Bank of England governor Mark Carney has announced that he expects inflation to stay low in the short term and near zero inflation may help the UK economy by boosting the spending power of households.

Chancellor George Osborne has said:
“A powerful mix of low prices and rising wages is good news for working people and family budgets.

“Of course the job is not done and we will continue to remain vigilant to all risks, particularly when the global economic situation is so uncertain."

Labour's shadow chief secretary to the Treasury, Shabana Mahmood, said:

"Many households are still struggling to pay the bills".

"We need stronger action now to raise productivity to deliver sustainable growth and rising living standards."

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