Transport services exerted downwards pressure on the inflation figure, but the biggest riser was the price of food and non-alcoholic drinks, up 1.3% between April and May this year.
The ONS said that with CPI at 4.5 per cent, the UK has markedly higher inflation figures than the the European Union average, which stands at 3.2%.
The next Inflation figures publication date is 12 July 2011.
Max Johnson, a forex broker at Currency Solutions, said unless inflation starts to rise again materially, by around another basis point, we can disregard any notion of a rise in Bank Rate during 2011.
“[MPC member] Martin Weale may argue that a rate rise now, however nominal, will give us a head start on inflation and obviate sharper potential rises in the future, but we don’t have the luxury of preparing for the future.
“In these highly precarious times, there’s only the present. And the present isn’t looking great for UK Plc.”
Meanwhile, Council of Mortgage Lender (CML) figures show more home buyers in April than March, but the market looks set to quieten further with mortgage house purchase approvals figures down, it said.
There were 40,900 loans, worth £5.9bn, advanced for house purchase in April, up from 37,900, worth £5.5bn, in March, but this is still down from 41,900, worth £6bn, a year earlier.
Remortgaging levels are fractionally higher than April last year, but down 28% since last month. The CML warns as the likelihood of a rate rise pushes further out, expectations for the remortgaging market look subdued, with remortgage approvals in April also down.
However, the number of loans to first-time buyers increased by 8% in April, from 14,700 worth £1.7bn in March to 15,800, worth £1.9bn. The average deposit in April was 80% of the purchase price, higher than the average over the last two years, but well below the 90% average pre-2008.
The number of home movers increased by 8% in April, with 25,100 advances worth £4bn, but the value of those loans has fallen year-on-year.
In April, home movers typically borrowed just below 70% of their home’s purchase price since the middle of 2009 – in April it was 69%.
Just 4% of first-time buyers borrowed an interest-only loan in April, against 30% before 2008, showing first-time buyers continue to be closed out of the interest-only market.
Michael Coogan, CML director general said: “The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011. However, the economic outlook, coupled with Bank of England subdued approvals data for April, suggests a muted summer for mortgage completions so we do not expect further increases in lending over the coming months.”
