THE Bank of England and government must work together to support jobs and businesses, trade union leaders urged today, as inflation unexpectedly held steady at 2.8 per cent in May.

The Office for National Statistics said Consumer Prices Index inflation matched April’s rate, defying economists’ forecasts of a rise to 3 per cent and remaining at its lowest level since March 2025.

A slowdown in food price increases offset pressure from rising air fares and fuel costs, pushing transport inflation to 6.8 per cent — its highest since November 2022.

Bank of England forecasts warn inflation could still rise as high as 3.6 per cent later this year as the impact of the war on Iran feeds through the economy.

Chancellor Rachel Reeves said the government has “got the right economic plan,” saying: “We’re protecting families and businesses from rising costs, with cuts in energy bills and freezes in fuel duty and rail fares.”

The data comes ahead of the Bank’s interest rate decision tomorrow.

TUC general secretary Paul Nowak said that families across the country continue to face rising costs from US President Donald Trump’s “illegal war,” warning: “With the energy price cap lifting at the end of the month, bills are set to rise even further.”

He said that in the last two months, inflation has risen by less than the Bank expected, most likely due to wider economic weakness caused by the war.

“So with jobs and businesses under pressure, the Bank must continue to resist calls to raise interest rates,” Mr Nowak said.

“They should now go further and press ahead with rate cuts to support the economy.

“It shouldn’t be working people who bear the brunt of Trumpflation and the wider economic costs of this war.”

He called for an emergency social tariff to cut bills for two-thirds of households who are in most need, and urged the government to stand ready to support jobs and businesses during growing economic pressures.

Unite general secretary Sharon Graham said workers “won’t feel better off today” due to continually rising costs, adding: “Instead of demanding price caps to protect workers, the government has hit their take-home pay with stealth taxes.

“Labour needs to remember whose side it is meant to be on. Drop the stealth taxes, tackle the profiteers and convince workers it has a way out of crisis.”