Inflation held steady in May due largely, to rising fuel prices and air and sea fares.
According to figures released by way of the Office For National Statistics, rising motor fuel prices produced the main upward contribution towards the improvement in the velocity between April and can 2018 but there were also large upward effects from air and sea fares, which rose between April and can this year, which fell regarding the same 8 weeks in 2009.
The Consumer Prices Index including owner occupiers’ housing costs 12-month inflation rate was 2.3% in May 2018, up from 2.2% in April 2018.
Partially offsetting downward effects originated from price changes for games, domestic electricity, food and non-alcoholic beverages, and furniture and furnishings.
The report also reveals that house price growth across The uk has followed similar trends to London since 2014 but has stayed tougher in recent times. Rental price growth have been broadly decreasing since August 2015 using the slowdown driven usually by the fall in rental price development in London in the same period.
The slowdown within the rental market likely reflects a mix of supply side and demand side factors.
The Royal Institution of Chartered Surveyors (RICS) April 2018 Residential Market Survey reported that tenant demand within the with three months to April 2018 was stagnant. To the supply side, there was clearly a sharp increasing amount of property transactions before introduction of upper Stamp Duty on additional properties in April 2016, using the effect of the increased stock of properties likely spending time to move high on the cost of rent.
While the increase in fuel prices hasn’t been entirely unexpected, due to the surge in oil prices, having less building inflationary pressure can often mean the planned rate hike from the Bank of England are going to be wear hold.