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UK Inflation Eases To BoE Target

UK inflation slowed to the central bank target in May, as widely expected, data from the Office for National Statistics showed Wednesday.

Consumer price inflation came in at 2 percent in May versus 2.1 percent in April. The rate matched expectations. The annual decline was largely driven by air fares and falling car prices.

On a monthly basis, consumer prices gained 0.3 percent versus 0.4 percent rise a year ago.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, also slowed in May, to 1.7 percent from 1.8 percent in the previous month.

The consumer prices index including owner occupiers' housing costs advanced 1.9 percent annually in May, down from 2.0 percent in April.

Another report from ONS showed that factory gate inflation slowed to 1.8 percent from. 2.1 percent in April. But this was above the forecast of 1.7 percent.

Month-on-month, output prices rose 0.3 percent for the second straight month compared to expectations of 0.2 percent.

Further, input price inflation eased sharply to 1.3 percent from 4.5 percent in April. Nonetheless, this was above the forecast of 0.8 percent. On month, input prices remained flat versus the expected growth of 0.2 percent.

In a separate communiqué, the ONS said house price inflation slowed to 1.4 percent in April from 1.6 percent in March. The lowest annual growth was in London, where prices fell 1.2 percent over a year ago.

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