Spike in Headline CPI; Core CPI Inches Up
Core inflation inched up while headline inflation surged in May, both on the back of low base effects from last year’s circuit breaker, combined with rising housing rentals and car prices. Core inflation rose to +0.8% (vs. +0.6% in Apr) while headline inflation jumped to +2.4% (vs. +2.1% in Apr), the fastest pace since Nov 2013. On a month-on-month basis, headline CPI jumped by a 8-year high of +0.8% (vs. -0.2% in Apr), while core CPI rose by +0.1% (vs. flat growth in Apr). The Phase 2 heightened measures did not dampen price pressures, with most categories recording month-on-month increases from April.