UK inflation rises

The rate of consumer price index (CPI) inflation increased to 2.7% in May, up from 2.4% in April, the Office for National Statistics (ONS) said.

The ONS said the rise was due to a record increase in airfares and higher fuel prices.

Airfares rose by 22% between April and May, the highest increase since comparable records began in 2001.

The Bank of England has said it expects inflation to exceed 3% this year.

May"s rise in inflation was higher than analysts predicted.

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The price of clothing and footwear rose by 1.2% month-on-month, after a colder than normal May saw the cost of women"s outdoor clothing increase.

However, food and drink prices fell, with a reduction in the cost of meat, vegetables, fruit, sugar and jams.

The Bank of England expects inflation to remain above its 2% target until early 2016 according to the BBC"s web site report Harris & Co accountants Northampton who see the impact of high inflation rates on their small and medium sized owner managed businesses.

Markit"s chief economist Chris Williamson said that the rise in inflation acted as "a reminder that the ongoing erosion of spending power from rising prices will continue to act as a brake on economic recovery".

The sharp rise in airfares appeared to have taken analysts by surprise.

Ross Walker, UK economist at RBS, said: "The good news is that [inflation] is coming in noticeably below the Bank of England"s May forecast, where they had a 2.9% average for the second quarter.

"So looking over a two or three-month horizon, which I think you have to do, the inflation picture is a little better, but still above target and still a little bit sticky."