The Office for National Statistics (ONS) has revealed that the UK’s inflation rate in May remained at 8.7%, the same as in April.

The Consumer Prices Index (CPI), including owner occupiers’ housing costs (CPIH), rose by 7.9%, up from 7.8% in April, while CPIH on a monthly basis stayed at 0.6% year on year.

Climbing prices for air travel, second-hand cars, and recreational and cultural goods and services were the biggest contributors to keeping inflation high.

Core CPIH (excluding energy, food, alcohol and tobacco costs) grew by 6.5% — the highest rate in over 30 years.

Industry experts react to inflation rate staying the same

This section will be constantly updated throughout the day — check regularly for more comments from industry experts

5:30pm

Mark Harris, CEO at SPF Private Clients:

“At least inflation had been moving in the right direction, even if at a frustratingly slow pace — now with no movement this month, it will put further pressure on the Bank of England to hike interest rates yet again.

“There is a strong argument for pausing the rate rises for now, giving the market time to settle down and adjust. Consecutive base rate rises have been painful and done little to stem inflation; it’s time for a different approach, letting them take effect, rather than causing continued anxiety and distress for borrowers.”

04:00pm

Justin Moy, MD at EHF Mortgages:

“The fear of god has already been put into borrowers this month, and there are plenty of panicking borrowers already in my inbox this morning screaming for help.

“I completed three product transfers before 09:00am this morning — others are trying to do something now but are just too early to be able to secure a product transfer from their lender and remortgaging will not be possible.

“I think many borrowers are very tuned into the economy and the importance of figures such as inflation, and now recognise far better the need to act swiftly.

“With so many deals expiring in the next six to nine months, the impact of the base rate increases, and those yet to come, are now truly hitting home.”

1:00pm

Riz Malik, director at R3 Mortgages: 

“The persistent 8.7% CPI inflation, coupled with rising core inflation, was certainly not the news we hoped for — it almost certainly signals an impending increase in the base rate tomorrow.

“Our hope is that the Bank of England will restrict its actions to a modest hike, preferably no more than 25 basis points given this data. This is not the data the mortgage market needs.”

Adam Oldfield, chief revenue officer at Phoebus Software:

“With consumer duty on the horizon, if they aren’t already, lenders will have to be look to identify and try to help the most exposed borrowers on their books.

“Yet, we have a way to go before we hit the 8% that was stress-tested into the mortgages that are coming to the end of their fixed-terms this year; in theory, borrowers should be able to afford the current increases, but that may not be true in the current cost of living reality.”

Douglas Grant, group CEO at Manx Financial Group PLC:

“The latest inflation figures remain stubbornly high, going against the Bank of England’s reassurances that 2023 will see inflation fall quickly.

“Interest rate hikes and ongoing rising costs continue to bring challenges that businesses are struggling to outmanoeuvre.

“Indeed, coupled with the global banking sector showing signs of weakness, SMEs must take this as a reminder to review their existing lending structures and ensure they can keep ahead of the storm.

“Following the implementation of short-term loan schemes in the past few years, we believe that it is vital the government continues to expand measures to fuel SME resilience and kick-start growth.

“We have been advocating for a permanent government-backed loan scheme that is sector focused and involves both traditional and non-traditional lenders to secure the future of our SMEs.”

Bob Singh, director at Chess Mortgages: 

“This was probably the least favourable outcome; the only worse thing would have been an increase.

“Static inflation, despite recent rate rises, paves the way for further increases in the base rate tomorrow.

“An increase of 0.5% now looks on the cards, and this will add to the recent volatility we have been seeing in the mortgage market.”