Inflation has returned to the 2% target for the first time in almost three years in what comes at a critical time, just weeks before the nation heads to the polls.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation fell to 2% in May, down from 2.3% in April.

It follows nearly three years of above-target inflation, with CPI last recorded at 2% in July 2021, before shooting higher amid the cost-of-living crisis.

The data will be watched closely ahead of the Bank of England’s next interest rate decision on Thursday, but policymakers are widely expected to hold fire on any cuts until after the General Election on July 4.

READ MORE: UK inflation slows to lowest level in nearly three years

It comes less than three weeks before polling day and as the political parties home in on economic pledges in their manifestos.

Prices are still rising ... just not as fast as before Prices are still rising ... just not as fast as before (Image: PA)

Falling inflation is “very significant news” which will allow the Tories to “bear down on taxes”, a Cabinet minister has said.

After official figures showed inflation dropping to the 2% target for the first time in nearly three years, Work and Pensions Secretary Mel Stride told Times Radio: “We’re doing the right things for the economy and as you’ve just heard there, in terms of inflation now, very significant news this morning.

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“That is now down at 2%. That is bang on the Bank of England’s target of 2%. You’ll recall back in the autumn, it was up above 11%. And the Prime Minister quite rightly made it his key priority to get that figure down.”

He evaded questions about top businesspeople including Phones4U billionaire John Caudwell abandoning the Conservatives for Labour, stressing that inflation “is very good for business, it’s very good for growth, it’s good for people’s living standards”.

Mr Stride said that “what this is allowing us to do now” is to “bear down on taxes”.

The SNP’s Social Justice spokesperson, and candidate for Glasgow East, David Linden said: “Inflation dropping might allow Rishi Sunak to briefly boast, but it’s of cold comfort to the households and families still bearing the brunt of higher mortgage payments, energy costs, and food bills as a result of Westminster’s cost of living crisis.

“And everyday those struggles are exacerbated by the austerity and Brexit neither Rishi Sunak or Keir Starmer propose to end.

“Scotland needs an end to austerity, Brexit, and the cost of living crisis - not more of the same with the Labour party’s cuts agenda."

He added: “Only SNP MPs will stand up for the transformational change people in Scotland really need. For a future made in Scotland, for Scotland, vote SNP on the 4th July.”