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UK Inflation Steady At 2.4%

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UK inflation remained stable at its highest level in more than a year in May on fuel prices, data from the Office for National Statistics revealed Wednesday.

Consumer price inflation held steady at 2.4 percent, the lowest since March 2017, and in line with expectations.

Month-on-month, consumer prices gained 0.4 percent in May, matching economists' expectations.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, also remained stable in May, at 2.1 percent.

ONS's Head of Inflation Mike Hardie said, "Recent large rises in the cost of crude oil have fed through to prices paid by consumers at the pump."

Air fares and ferry prices also contributed to the overall increase in inflation due to the timing of Easter, the ONS official noted.

"However, these effects have been partly offset by price falls in computer games and energy costs rising by less than this time last year," Hardie added.

With inflation unchanged and a number of other economic indicators pointing to a weakening economy, the prospect of an August rate hike is looking more remote, Suren Thiru, head of economics at the British Chambers of Commerce, said.

Another report from the ONS showed that output inflation has been positive since July 2016, but this was the first time the rate has picked up since November 2017.

Output price inflation climbed to 2.9 percent annually in May, as expected, from 2.5 percent. Month-on-month, prices registered a steady increase of 0.4 percent, while economists had forecast a 0.3 percent rise.

At the same time, input price inflation accelerated more-than-expected to 9.2 percent in May from 5.6 percent a month ago. Prices were forecast to rise moderately by 7.6 percent.

Likewise, monthly inflation advanced to 2.8 percent from 0.6 percent, and above the expected increase of 1.8 percent.

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