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UK inflation rate turns positive



Transport costs helped the UK's inflation rate turn positive in May after one month of negative inflation.
Inflation, as measured by Consumer Prices Index (CPI), rose to 0.1% in May, up from -0.1% in April.
The biggest contribution to the rise came from transport, notably air fares, the Office for National Statistics said.
A rise in food and petrol prices during May also helped inflation turn positive, it said.
In April, CPI inflation turned negative for the first time since 1960.
ONS statistician Philip Gooding said: "Last month CPI turned negative, mainly because of falling transport fares due to the timing of Easter. This month, that fall has been reversed."
He added that the falls in food and fuel costs over the past year "have eased this month, helping to push inflation up".
While the prices of food and fuel rose in May from the previous month, the prices were still lower than a year earlier.
However, while the overall effect of food and fuel on CPI inflation pulled the rate down by about 0.5 percentage points in May, this was less pronounced than the month before when the prices had a negative effect of 0.7 percentage points.
'Marginal and fleeting'
Ben Brettell, senior economist at Hargreaves Lansdown, said that "seasonal factors surrounding the timing of the Easter holiday were at work in last month's figures - CPI inflation was pushed down by cheaper air fares relative to last year.
Now those factors have dropped out of the calculation we are back where we started."
Negative inflation "proved both marginal and fleeting", said Howard Archer, chief UK and European economist at IHS Global Insight.
"We doubt that deflation will recur in the UK, although it cannot be completely ruled out if oil prices take a renewed appreciable downward lurch," he said
Nevertheless, inflationary pressures "remained limited in May and core inflation was still only 0.9% after hitting a 14-year low of 0.8% in April," Mr Archer added.
Bank of England governor Mark Carney has said he expects inflation to remain low in the short term.
The Bank expects near-zero inflation to help the UK economy by boosting the spending power of households.