According to the latest figures released by the Office for National Statistics, the main rate of inflation decreased from 3.5% in April to 3.4% in the year to May.
Looking at the figures behind the headline rate shows that food prices have increased for the third month in a row. At 4.4%, this represents the highest inflation rate for food since February 2024.
Some feel that these increases are because businesses are passing on the costs of April’s increase in employer’s national insurance.
However, this is not the only factor at play. Prices for chocolate have increased by 17.7% in the year to May. This is primarily due to bad harvests in areas that produce cocoa meaning that stocks of chocolate have been low and pushing prices up.
The figures showed some good news though in the form of cheaper travel prices.
While inflation had reduced in the earlier part of the year, the current figures show that inflationary pressures continue to be felt.
New government reforms to the UK Internal Market Act aim to make it easier for businesses to trade across England, Scotland, Wales and Northern Ireland - with less friction and more certainty.
The Tax Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW) is encouraging employers to take a fresh look at the Employment Allowance. If you have a payroll and are not already claiming this allowance, it could reduce your employer national insurance contributions (NICs) by up to £10,500 for the 2025/26 tax year.
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