Britain’s inflation rate rose back above zero in May, ending the economy’s brush with deflation after just one month.

Consumer prices rose an annual 0.1 percent after falling 0.1 percent in April, the Office for National Statistics said in London on Tuesday. The increase, the first in four months, matched the median estimate of economists in a Bloomberg survey.

Core inflation accelerated to 0.9 per cent from 0.8 per cent.

While inflation remains well below the Bank of England's 2 per cent target, Governor Mark Carney forecasts that it will pick up later this year and move toward the goal in 2016. The BOE kept its benchmark interest rate at a record-low 0.5 per cent this month and minutes of the meeting on Wednesday will provide insight into policy makers' outlook for price pressures.

UK inflation has been pushed lower by a drop in oil prices in the second half of 2014, and the BOE says that impact will prove temporary. There was further downward pressure on average prices in April because of falling air and sea fares due to the timing of Easter, ONS statistician Philip Gooding said. That effect was reversed in May. “In addition, the falls in food and fuel costs over the last year have eased this month, helping to push inflation up,” he said.

Meanwhile London house-price inflation slowed to the least in more than two years in April, reflecting uncertainty about property taxes in the buildup to the general election last month.

Annual house-price growth in the UK capital slowed to 4.3 per cent from 11.2 per cent, the Office for National Statistics said in London on Tuesday. That’s the smallest increase since October 2012.

Bloomberg