Inflation has returned as an economic bogeyman in recent years. Of course, many economists and financial experts are quick to point out that the years of low inflation and low interest rates that we have experienced since the global financial crisis are the historic anomaly. However, that doesn’t provide much comfort to those feeling the pressure of rising prices.
In the year to May, the consumer price index remained at 2.8%, according to the latest data from the Office for National Statistics (ONS). This is of course to be welcomed, especially as rises in food prices slowed (although it should be remembered that they were still getting more expensive).
“Food and non-alcoholic beverage prices rose by 2.2% in the 12 months to May 2026, down from 3.0% in the 12 months to April,” the ONS said. “The rate in May was the lowest since December 2024, when it was 2.0%. On a monthly basis, food and non-alcoholic beverage prices fell by 0.1% in May 2026, but rose by 0.7% a year ago.”
However, less welcome news was that motor fuel prices increased by 24.6% in the 12 months to May 2026 – the highest rate recorded since September 2022. This was, of course, as a result of the war with Iran.
At the time of writing, there is some hope that the US-Iran agreement holds and the Strait of Hormuz will reopen, leading to an easing of inflationary pressure. However, there are warnings that, even if this is the case, the effects will take some time to come through to the economy.
For example, in response to the figures, Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, said: “Even with hostilities seemingly over, the UK faces a painful hangover from the Iran conflict, with energy and other supply chains likely to take months to normalise, delaying any meaningful easing in inflation until late 2026.”
For charities, this means cost pressures will remain acute for some time and many will face difficult decisions. At times like these, it is even more important to realise that the sector is in it together. Sharing of ideas and experience will help others navigate through these difficulties.
Tristan Blythe is editor of Charity Finance
