Press Story

IPPR has reacted to this morning’s ONS data release of CPI data for May 2025, which showed inflation at 3.4 per cent, effectively level compared with 3.5 per cent in April.

Carsten Jung, associate director for economic policy at IPPR, said:

"Inflation in May was in line with expectations and services inflation was slightly below expectations. This and a cooling jobs market should prompt the Bank of England to cut interest rates sooner, easing the burden on businesses and households.

“A key driver of persistent inflation is the cost of energy, which rose in April and is set to remain elevated. Energy prices stand some 60 per cent above pre-crisis levels. Our heavy dependence on gas leaves the UK extraordinarily vulnerable to such shocks, so weaning the country off it is the best way to strengthen resilience.

“But the government could and should do more to reduce the cost of living for households immediately. For instance, rebalancing energy bills to lower electricity prices compared to gas, helping households with energy debt and regulating the additional fees charged to consumers could all provide prompt relief - and demonstrate that ministers are proactive in tackling the cost of living.”

ENDS

Carsten Jung, associate director for economic policy at IPPR (former Bank of England official), and Pranesh Narayanan, IPPR research fellow (former Treasury economist), are available for interview.

CONTACT

David Wastell, director of news and communications: 07921 403651 d.wastell@ippr.org