INFLATION held steady in May, despite surging oil prices due to tensions in the Middle East.
Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) remained at 2.4 per cent in May, unchanged from April and in line with economists' expectations.
The steady level of the cost of living came despite a rise in fuel prices, with the price of petrol up 4.6p per litre month-on-month to 125.3p, the largest rise since January 2011.
Diesel prices rose 4.7p per litre to 129.2p.
Mike Hardie, head of inflation at the ONS, said: "Recent large rises in the cost of crude oil have fed through to prices paid by consumers at the pump. Air fares and ferry prices also contributed to the overall increase in inflation due to the timing of Easter.
"However, these effects have been partly offset by price falls in computer games and energy costs rising by less than this time last year."
Sterling was trading 0.4 per cent down versus the dollar at 1.33 and 0.3 per cent down against the euro at 1.13 following the news.
Global oil prices have been rising due to tensions in the Middle East after US President Donald Trump said America was walking away from the Iran nuclear deal, raising the threat of a drop in production from the region.
The ONS said increases in global prices were also related to declines in production in Venezuela.
However, Brent crude prices have been volatile more recently on reports that Russia and Saudi Arabia could increase oil production.
Air fares, which were influenced by the early timing of Easter this year, registered annual inflation of 8.2 per cent, having fallen by 7.9 per cent in the prior month.
Food price rises eased in May, with inflation coming in at 2 per cent, down from 2.3 per cent in the prior month.
Households were also hit with a rise in electricity bills, which were up 4.5 per cent year-on-year. However, this was down from inflation of 8.6 per cent in April.
A series of energy companies have announced increases to tariffs recently, and economists expect these bill hikes will continue to feed through to families throughout the summer.
The Retail Prices Index (RPI), a separate measure on inflation, was 3.3 per cent last month, down from 3.4 per cent in April.
The Consumer Prices Index including owner-occupiers' housing costs (CPIH) - the ONS' preferred measure of inflation - was 2.3 per cent in May, up from 2.2 per cent in April 2018.
