The Consumer Price Index (CPI) has fallen for the second month in a row to 2.8% from 3%, according to the Bank of England.

To beat inflation, basic rate tax payers now need an account paying at least 3.50% to gain benefit in real terms from their savings, increasing to 4.67% for higher rate tax payers, and 5.60% for 50% tax payers.

The largest downward pressures to the change in CPI annual inflation came from motor fuels and food & non-alcoholic beverages. The largest upward pressures to the change in CPI annual inflation came from air and sea transport, where the timing of Easter had a significant impact on the April to May movement. The CPI stands at 122.8 in May 2012 based on 2005 = 100.

Retail Price Index (RPI) annual inflation stands at 3.1% in May 2012, down from 3.5% in April. The largest downward pressures to this change came from petrol & oil and food. Partially offsetting these was an upward pressure from other travel costs which includes air transport. The RPI stands at 242.4 in May 2012 based on January 1987 = 100.