UK inflation unexpectedly stays at 2.8% with higher transport costs offset by slower food price rises – business live

UK inflation unexpectedly held at 2.8% in May versus 3.0% expected, as slower food inflation offset higher transport costs and lower energy bills filtered through. The print keeps the Bank of England on track to hold rates at Thursday’s meeting, while the Fed is also expected to stay on hold later today — a mildly supportive backdrop for gold via lower policy-rate urgency, but not a clear catalyst on its own. The ONS data showed food inflation easing to 2.2% y/y from 3.0% in April, its lowest since December 2024. That was partly balanced by firmer air fares, fuel and sea fares, with markets also reassessing the inflation hit from the Iran conflict after the ceasefire/truce developments eased oil prices. Brent is down 0.7% at $78.40/bbl and WTI down 0.8% at $75.41/bbl, both about 5% lower on the day and near three-month lows. For precious metals, the key takeaway is that UK inflation is sticky but not re-accelerating, which reduces pressure on the BoE to tighten further. The near-term gold impulse is more likely to come from the Fed decision, real-rate expectations and broader risk sentiment than from this UK print alone. If inflation continues to moderate alongside falling oil, that keeps the macro case intact for gold as a store of value, but the event is more background than a direct trade trigger.