UK inflation held at 2.8% in May ahead of Bank of England vote

UK inflation was unchanged at 2.8% in May, coming in below the 3% annual rate economists polled by Reuters had expected and strengthening the case for the Bank of England to keep rates steady this week. The Office for National Statistics said transport made the biggest upward contribution to prices, led by air fares, motor fuel and sea fares, while food and non-alcoholic drink prices fell. The Bank of England held its key rate at 3.75% at its last meeting. LSEG data showed markets were pricing in a 95% chance of another hold on Thursday, even as traders expect the central bank to raise rates by year-end as higher energy costs feed through later this summer.