UK inflation falls to 3.4%, complicating Bank of England’s interest rate task

Annual drop in May but policymakers still almost certain to hold rates at 4.25% on Thursday

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Inflation in the UK fell to 3.4% last month as shop prices declined, complicating the Bank of England’s interest rates decision on Thursday.

Policymakers are still almost certain to hold interest rates at 4.25% at their meeting despite May’s decline in the consumer prices index (CPI), but it could raise hopes for cuts for the summer and autumn.