Inflation has hit the Bank of England’s target for the first time in almost three years.

Prices rose at 2% in the year to May, down from 2.3% the month before, official figures show.

The economy is a key talking point in the run-up to the general election on 4 July, with all of the main parties debating how they would keep the cost of living under control.

It comes ahead of a Bank of England decision on UK interest rates this Thursday.

The bank is expected to hold the rate at 5.25% for seventh meeting in a row.

The easing in the inflation rate was driven by a slowdown in price rises for food and soft drinks, recreation and culture, and furniture and household goods.

Inflation hit 11.1% – its highest level in over 40 years – in October 2022 as energy and food prices surged due to Russia’s invasion of Ukraine.

May’s figures are the last big official economic statistics of the general election campaign and will be sure to spark a significant debate among the main parties.

The Conservatives will hope the figures can help its story of an economic turnaround.

Labour will continue to press concerns about an ongoing cost of living crisis.

Food prices are still 25% higher than at the beginning of 2022 and petrol prices are now on the way up again.

The slowdown in UK inflation in May was sharper than in the eurozone or the US, where the rates were 2.6% and 3.3% respectively.

Inflation is now lower in the UK than most of the rest of the G7 advanced economies, apart from Italy.

Gary Wildman, the owner of John Wildman & Sons butchers, told the BBC he had seen price rises levelling out at the store he started with his dad 31 years ago in Rusington, West Sussex.

“Prices are probably 10 to 15% more than they were at the beginning of Covid, but they are level now, definitely,” he told the BBC.

However, he said some products such as pork were still going up. Its energy bills are also much higher than they were a few years ago.

“You do take a hit to your margins,” he said. “You can’t pass all costs onto customers or the customers wouldn’t come in.”