“Today’s ONS figures suggest that annual CPI inflation was 8.7 per cent in May, unchanged from April, as price decreases for motor fuels were offset by rising prices for food, travel, and recreational and cultural goods and services. Worryingly, core CPI inflation rose to a 31-year high of 7.1 per cent in May from 6.8 per cent in April, while NIESR’s measure of trimmed-mean inflation fell only slightly from 10.2 per cent in April to 9.9 per cent in May. Moreover, services inflation rose to 7.4 per cent in May following last week’s wage data showing economy-wide regular pay growth of 6.5 per cent. These indicators of underlying inflationary pressure suggest that we can expect CPI inflation to remain high through 2023 and that high inflation may be embedding itself in expectations. Taken together, today’s data may well warrant a further hike at tomorrow’s MPC meeting, despite the fact that much of the ’heavy lifting’ has already taken place.”