Inflation falls

The UK rate of inflation fell last month to a two-and-a-half year low owing to slowing fuel and food prices.

The Consumer Prices Index (CPI) measure fell to 2.8% in May from 3% in April, the Office for National Statistics (ONS) said.

The Retail Prices Index (RPI) measure fell to 3.1% from 3.5% in April.

Inflation has fallen from 5.2% last September due to the waning impact of the VAT rise in 2011 and falling energy, food and commodity prices.

The fall in inflation was unexpected, as the consensus among economists was that the rate would be unchanged in May. However, analysts said price rises were likely to slow further in the coming months.