Package holiday costs contribute to inflation

Package holiday costs contribute to inflation

The rising cost of foreign package holidays contributed to pushing the UK inflation rate to the highest level in four years in May.

Overseas holidays and imported computer games were both affected by the drop in the value of sterling.

The rate of inflation was pushed up to 2.9% last month from 2.7% in April – the highest since June 2013, and above the Bank of England’s 2% target.

The price of food and clothing also went up slightly but fuel costs fell for a third month in a row, according to the Office for National Statistics.

While foreign holiday costs rose, the largest downward contribution came from the transport sector with motor fuel, air and sea fares falling.

The drop in the value of the pound since last year’s Brexit referendum has increased the cost of imports, which has been one of the key factors behind the rise in inflation.

But wage increases have not kept up with the rise in prices.

Average weekly earnings excluding bonuses increased by 2.1% in the three months to March.

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