Consumer price inflation decreased by 0.3 percentage points to 0.5 per cent in the year to May 2020, as per data released by the ONS. Our new analysis of 89,142 locally collected goods and services indicates price declines in the transport, recreation and culture, and hotels and restaurants categories. By contrast, underlying inflation, which excludes the most extreme price changes, increased in 11 UK regions, with only London recording a reduction in underlying inflation. The broad-based increase in underlying inflation led to a 0.2 percentage point increase in the national figure, to 1.2 per cent in May. This is the third month of increase in underlying inflation and for that reason our forecast suggests headline CPI inflation above 2 per cent in the 12 months to May 2021.