From 2h ago 07.02 BST UK inflation slows to 3.4% in May as transport costs ease Inflation in the UK has slowed slightly, as expected. The consumer prices index rose by 3.4% year on year in May, down from 3.5% in April, according to the Office for National Statistics. This was bang in line with City economists’ forecasts. The central bank’s target is 2%. The core rate, which excludes energy and food, fell to 3.5% from 3.8%, also as expected. The Consumer Prices Index (CPI) rose by 3.4% in the 12 months to May 2025, compared with 3.5% in the 12 months to April.

Read the full article ➡️ https://t.co/m9vpk5oFn3 pic.twitter.com/DtOjwdagzv — Office for National Statistics (ONS) (@ONS) June 18, 2025 The largest downward contribution came from transport; the largest, partially offsetting, upward contributions came from food, and furniture and household goods, the ONS said. Share Updated at 07.35 BST

12m ago 09.11 BST Shares in Ocado jumped by more than 4% in early trading, after the UK online grocer and technology company clinched a deal with Catalonian supermarket group Bon Preu to build a robotic warehouse near Barcelona. Ocado said it was expanding its partnership with Bon Preu, which was its first international partner in 2017. Ocado sells groceries online and has a joint venture with Marks & Spencer, but investors are more interested in its technology. It has developed robots that zip up and down warehouse aisles to pick groceries, and builds automated warehouses for other retailers around the world. Following the early share price gains, Ocado’s stock has now dipped slightly, by 0.16% to 244.1p a share. Share

19m ago 09.04 BST AO World profits jump after musicMagpie acquisition Lauren Almeida In other news, the UK online electrical goods seller AO World has reported a jump in full-year profits on the back of its musicMagpie acquisition. It posted a 32% rise in like-for-like adjusted pre-tax profit to £45m for its latest financial year, ahead of what investors had been expecting. It was the best year ever for profits by that metric, the retailer said.

The company, which sells a range of electrical goods from washing machines to laptops, reported a 7% rise in like-for-like revenue to £1.1bn, while sales in its business-to-consumer division gew by 12% to £832m in the year ended in March.

Its growth was driven by the expansion of its membership offering, as well as a wider product range and its recent acquisition of the second-hand electronics retailer musicMagpie, the company said.

However on a statutory basis, which takes into account fees related to the musicMagpie acquisition as well as an impairment charge related to its mobile business, dropped by 40% to £21m.

Management struck an optimistic tone, reiterating a target of adjusted pre-tax profit of £40m to £50m for its current financial year, “despite the wider macroeconomic challenges, particularly employment cost increases”.

AO World, which employed about 3,000 people last year, noted there had been a rise in employment costs over the year which it said “will only further increase” this year due to government changes to the minimum wage and employers’ National Insurance contributions. It will “increasingly look to mitigate these costs through automation, outsourcing and offshoring”. Share

23m ago 09.00 BST European gas prices rise for sixth day, with Hormuz traffic in focus European gas prices are rising for a sixth day, as traders worry that an escalating conflict between Israel and Iran could disrupt global energy flows. European natural gas futures jumped above €39 per megawatt hour, the highest in more than ten weeks. The Dutch benchmark rose by 1.5% to 39.805 MWh. Tensions heightened after Donald Trump urged the evacuation of Tehran and dismissed peace talks. The US president wrote on social media that the United States knows the location of Iran’s leader Ayatollah Khamenei, adding that the US would not kill him “for now” but called for Iran’s “unconditional surrender”. While Europe currently has enough gas supplies, its reliance on global liquefied natural gas makes it vulnerable to geopolitical shocks. A big concern is the Strait of Hormuz, through which a fifth of global LNG and oil shipments pass. If Iran blocks the waterway (the only sea passage from the Persian Gulf to the open ocean), Qatari exports, which account for nearly 4% of Europe’s gas, could be affected. So far, Quatar says navigation remains normal. Hotter than usual temperatures across Europe are boosting demand for air conditioning, ramping up energy demand. Share

40m ago 08.43 BST The pound has gained nearly 0.3% against the dollar, trading at $1.3461, while the euro is up by more than 0.3% against the greenback, at $1.1515. On the stock markets, the FTSE 100 index is 20 points ahead at 8,854, up 0.2%. Germany’s Dax is slightly in the red at 23,419 and France’s CAC is up by a smidgen, while Italy’s FTSE MiB index has added 0.25%. Share

46m ago 08.37 BST Dollar wobbles amid Israel-Iran fighting as investors await Fed decision In financial markets, the dollar is falling against most major currencies, as the latest developments in the Israel-Iran conflict left investors nervous – ahead of the US Federal Reserve’s interest rate decision later today. Israel has pounded Iran over the past six days, with strikes against nuclear and military sites and the assassination of top nuclear scientists and military leaders, and is pushing for regime change in the Islamic Republic. Israel’s defence forces said they launched a fresh wave of strikes on Tehran in the early hours of Wednesday morning, warning residents in parts of the city to urgently evacuate. Israel-Iran conflict live: major explosion reported in Tehran as Trump calls for ‘unconditional surrender’ Read more The US military is deploying more fighter jets to the Middle East, Reuters reported, sparking speculation of US intervention that investors fear would widen the conflict. The dollar fell by nearly 0.3% against a basket of major currencies. It has lost more than 8% so far this year as confidence in the US has waned due to Donald Trump’s sweeping trade tariffs and other policies. Currency strategist Rodrigo Catril at National Australia Bank told Reuters: The dollar is still a safe haven because of its depth and liquidity, so yes the structural forces are diluting the dollar safe-haven activities, but they’re not eroding them completely. But in a scenario of big risk aversion, the dollar will still gain support but maybe not to the same extent it has managed in the past. Share

1h ago 08.22 BST The latest UK inflation data showed that the annual rate for goods inflation rose from 1.7% to 2% in May, while the services annual rate slowed from 5.4% to 4.7%. The latter is closely watched by the Bank of England, as the UK economy is dominated by the service industries. Sanjay Raja, chief UK economist at Deutsche Bank, The focus now will turn to geopolitical events and the rise in energy prices. This will undoubtedly complicate the monetary policy committee’s task. Higher energy prices will mean higher inflation expectations. The trump card? The labour market data. The ongoing labour market loosening should give the MPC a little more confidence in its ‘gradual and careful’ approach to dialling down restrictive policy. And crucially, today’s data should help convince MPC members on the fence that price pressures are tracking as expected and underlying disinflation remains on track. But don’t expect a dovish pivot just yet – more data and more accumulation of evidence that the economy is returning to a sustainable equilibrium will be needed to push the MPC into a more dovish direction. Share

1h ago 08.17 BST Inflation pressures remain sticky in the UK, according to Rob Wood, chief UK economist at Pantheon Macroeconomics. Looking ahead, we continue to expect CPI inflation to average 3.4% for the rest of the year as strong wage growth, minimum wage hikes and tax increases pass through to retail prices. We think headline inflation will struggle to dip below 3% before April 2026. By that point, inflation will have been above target almost continuously for five years, risking further deanchoring of inflation expectations and persistent wage pressure. Granted, US president Trump’s trade war could lead to some diversion of Chinese exports previously bound to the US, which could cut UK inflation. But war in the Middle-East has boosted oil and natural gas prices, adding 10bp to our forecast inflation peak and risks probably lie to the upside. We think the MPC will have to proceed cautiously. We expect just one more rate cut this year in November, though after last week’s dovish labour market and growth data August looks like a better bet for now. Either way, we think one more rate cut this year is the right call because of sticky inflation, and we expect rebounds in GDP and job growth to give a more hawkish tint to the data flow heading into the monetary policy committee’s August policy meeting. For this week’s MPC meeting a hold is all but guaranteed and we expect little change in guidance. Share

1h ago 08.10 BST Dr Liliana Danila, lead economist at the Food and Drink Federation, explains the rise in food costs, with further increases to come. Food and drink inflation shot up in May 2025, reaching 4.4% compared to 3.4% in April. These figures are being driven by rising energy and ingredients costs. Food manufacturing is an energy intensive sector, and wholesale gas prices are 7.8% higher compared to last May, as UK businesses face significantly higher industrial energy costs compared to other nations. Meanwhile, the price of ingredients has also surged. For example, in the last two years, the price of cocoa has tripled, while wholesale butter prices are also 55% higher than last year. Recent and upcoming regulations are also bringing additional costs to manufacturers. With these price increases being coupled with a drop in consumer confidence and a fall in retail sales, food manufacturers have been absorbing rising costs for several years. Recent geopolitical uncertainty is also likely to result in higher pressure on energy and imports, and so unstable manufacturing costs are likely to persist. As a result, we now expect to reach our forecast of 4.8% food and drink inflation for December sooner than anticipated. Share

1h ago 08.07 BST Rise in oil prices to lead to higher prices at the pumps While UK petrol and diesel prices fell last month, this could be short-lived. A sharp rise in crude prices triggered by the Israel-Iran conflict is likely to lead to higher prices at the pumps. Oil prices are little changed at the moment, after rising sharply in recent days following Israel’s surprise attack on Iran on Friday, which prompted Iran to retaliate with its own missile strikes. Brent crude, the global benchmark, is trading above $76 a barrel, at $76.38. It’s around 10% higher than before Israel’s attacks on Iran, at levels not seen since February. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: Already it appears some ships are avoiding the region. There’s not an exodus yet, but companies are operating with extreme caution, and a closure of the strait would disrupt global supply chains. Just as sticky inflation is already a concern the surge in energy prices and a potential ramp up in shipping costs is set to cause more trouble. It’s certainly an extra headache for policymakers deciding on interest rate cuts this week. Consumer Price Inflation hasn’t budged in the UK, coming in at 3.4% for May. This was expected and although this is a slightly better scenario than another ramp up in price increases, it’s unlikely to persuade more decision makers to vote for a rate cut tomorrow. Higher crude prices are set to lead to more expensive prices at the pumps, and potentially increased transport bills. Natural gas prices have also risen amid the geopolitical instability, given the potential disruption of LNG shipments from Qatar, which is the third largest global exporter. A long, drawn-out conflict could keep prices elevated, which would have a knock-on effect on electricity prices, increasing energy bills for consumers and companies later this year, just as they had hoped lower costs were here to stay. Nevertheless at least two more interest rate cuts are expected from the Bank of England this year, with the chances of a reduction in August bulking up a little. Share Updated at 08.11 BST

2h ago 07.44 BST Reeves: ‘More to do’ to bring down inflation Rachel Reeves said there was “more to do” to bring down inflation and help with the cost of living. The UK chancellor said the government’s “number one mission is to put more money in the pockets of working people”. We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government, but we know there’s more to do. Last week we extended the £3 bus fare cap, funded free school meals for over half a million more children and are delivering our plans for free breakfast clubs for every child in the country. This government is investing in Britain’s renewal to make working people better off. View image in fullscreen Chancellor of the Exchequer Rachel Reeves outside 11 Downing Street, London, ahead of a Cabinet meeting, on 17 June. Photograph: Yui Mok/PA Meanwhile, the shadow chancellor Sir Mel Stride, from the opposition Conservative party, said: This morning’s news that inflation remains well above the 2% target is deeply worrying for families. Labour’s choices to tax jobs and ramp up borrowing are killing growth and stoking inflation – making everyday essentials more expensive. Share Updated at 07.44 BST

2h ago 07.22 BST Markets still expect no rate change from Bank of England tomorrow Here’s our full take. The inflation figures come a day before the Bank of England announces its latest interest rate decision, with markets expecting no change at noon tomorrow. Traders have pencilled in a 10% chance of a cut. A reduction in August seems more likely. Markets are still expecting two more quarter point cuts to the base rate by the end of the year, from its current 4.25%. UK inflation falls to 3.4%, complicating Bank of England’s interest rate task Read more Share Updated at 07.29 BST

2h ago 07.16 BST Food and non-alcoholic drink prices have picked up, though – rising by 4.4% in the 12 months to May versus 3.4% in April. This was the highest rate of food inflation since February last year, when it was 5%. The price of chocolate, confectionery and ice-cream rose between April and May but fell between the same months a year ago. Meat prices rose by more this year than this time last year. Prices of furniture and household goods rose by 0.8% in May, the highest annual rate since December 2023, but well below the peaks seen in 2022. Prices of fridge freezers and vacuum cleaners rose in May but fell a year ago, reflecting different timing of retailers’ sales. Prices of bedroom furniture rose by more this May than a year ago. Share Updated at 07.31 BST

2h ago 07.10 BST Transport costs eased last month, pushing overall inflation lower. The statistics office said transport prices rose by 0.7% in the 12 months to May, down from 3.3% in the 12 months to April, reflecting drops in air fares (which jumped in April) and petrol prices, together with the correction of an error in vehicle excise duty prices. The latter was overstated in April and the series corrected from May. As is standard practice, the April figure has not been revised, the ONS said. The average price of petrol fell by 2.1 pence a litre between April and May to 132.4p a litre, down from 148.8p per litre in May 2024. Diesel prices fell by 2.6p a litre to 139.1p a litre, down from 156.3p a litre in May last year. Commenting on today’s inflation figures for May 2025, ONS Acting Chief Economist Richard Heys said: (quote 1 of 2) pic.twitter.com/hxuG9QCzYu — Office for National Statistics (ONS) (@ONS) June 18, 2025 Richard Heys went on to say: (quote 2 of 2) pic.twitter.com/TgMXGX8jfv — Office for National Statistics (ONS) (@ONS) June 18, 2025 Share Updated at 07.12 BST

2h ago 07.02 BST UK inflation slows to 3.4% in May as transport costs ease Inflation in the UK has slowed slightly, as expected. The consumer prices index rose by 3.4% year on year in May, down from 3.5% in April, according to the Office for National Statistics. This was bang in line with City economists’ forecasts. The central bank’s target is 2%. The core rate, which excludes energy and food, fell to 3.5% from 3.8%, also as expected. The Consumer Prices Index (CPI) rose by 3.4% in the 12 months to May 2025, compared with 3.5% in the 12 months to April.

Read the full article ➡️ https://t.co/m9vpk5oFn3 pic.twitter.com/DtOjwdagzv — Office for National Statistics (ONS) (@ONS) June 18, 2025 The largest downward contribution came from transport; the largest, partially offsetting, upward contributions came from food, and furniture and household goods, the ONS said. Share Updated at 07.35 BST

3h ago 06.47 BST Japan’s exports have fallen for the first time in eight months along with imports, reflecting the impact of sweeping US tariffs. The country’s exports dropped by 1.7% year on year to a four-month low in May, following a 2% gain in April, and marking the first decline since September. Imports slumped by 7.7% to a three-month low, the biggest drop since the start of last year. Japan’s Nikkei shrugged off the news to rise by 0.8% while several other Asian stock markets were in the red – Hong Kong’s Hang Seng fell by 1.2% and the Singapore exchange lost 0.4%. The South Korean Kospi rose by 0.5% and Chinese indices rose slightly. Share