Boost for Rishi Sunak as inflation FINALLY falls back to 2% - so will the Bank of England finally ease the pressure on Brits by cutting interest rates?

Inflation has finally fallen back to the Bank of England's target of 2 per cent, it was revealed today.

The latest official figures showed the headline CPI dropping to 2 per cent in May, from 2.3 per cent in April.

The news is a welcome boost for Rishi Sunak's election campaign. He will argue that prices are 'back under control' today saying it is now his 'moral mission' to slash taxes.

It marks the first time inflation has been at the BoE's target since July 2021, before the cost-of-living crisis saw inflation shoot up – at one stage hitting levels not seen for 40 years.

It will also give Threadneedle Street pause for thought as it considers interest rates at the MPC meeting tomorrow.

The latest official figures showed the headline CPI dropping to 2 per cent in May, from 2.3 per cent in April

The latest official figures showed the headline CPI dropping to 2 per cent in May, from 2.3 per cent in April

The news is a welcome boost for Rishi Sunak's (pictured yesterday) election campaign

The news is a welcome boost for Rishi Sunak's (pictured yesterday) election campaign

Most economists believe rates will be held at 5.25, with the July 4 election regarded as hampering decisions.

A return to target will give a pre-election fillip to the Conservatives, with Mr Sunak having been quick to declare victory on inflation already last month – even though inflation was always expected to fall sharply as rising energy and food costs subside.

CBI principal economist Martin Sartorius said: 'Another fall in inflation in May will come as welcome news to households as we move towards a more benign inflationary environment.

'However, many will still be feeling the pinch due to the level of prices being far higher than in previous years, particularly for food and energy bills.

'Today's data sets the stage for the Monetary Policy Committee to cut interest rates in August, in line with our latest forecast's expectations.

'However, rate-setters will still need to weigh the fall in headline inflation against signs that domestic price pressures, such as elevated pay growth, are proving slower to come down.

'This means that they are likely to move cautiously beyond August to avoid putting further upward pressure on inflation, especially as the growth outlook improves at home and geopolitical tensions remain heightened.'

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