Inflation eases to 3.4% in May

Lower oil prices and last year's hike in tobacco and alcohol prices contributed to the fall. However, inflation is still above the Bank of England's official 2% target, requiring Bank of England governor Mervyn King to write an open letter to Chancellor George Osborne. The ONS said the only upward pressure on CPI came from household and household services. The retail price index (RPI) - a wider measure of inflation used for wage negotiations - fell to 5.1% in the year to May, down from 5.3% in April. The ONS attributed the decrease to the same factors which affected CPI. The inf...