UK inflation fell more sharply than expected in March, reaching its lowest level in five months as falling petrol prices and flat food costs helped to ease the pressure on consumers and policymakers.
Figures published by the Office for National Statistics (ONS) show that the annual rate of inflation fell to 2.6%, down from 2.8% in February, and well below forecasts by economists and the Bank of England. It marks the slowest pace of price growth since October 2024, offering a glimmer of relief for households still grappling with the cost-of-living crisis.
Grant Fitzner, chief economist at the ONS, said: “Inflation eased again in March, driven by a variety of factors including falling fuel prices and unchanged food costs compared with the price rises we saw this time last year. The only significant offset came from clothing, which rose strongly following an unusual decrease in February.”
Services inflation, closely monitored by the Bank of England as a measure of domestic price pressures, fell to 4.7% from 5%, coming in below the Bank’s forecast of 4.9%. Core inflation, which excludes volatile food and energy prices, edged down slightly to 3.4% from 3.5%.
The drop in inflation was helped by slower price rises in categories such as games and toys, while food inflation eased to 3%, from 3.3% in February. The retail price index (RPI), an older measure still used in some contracts, also fell to 3.2% from 3.4%.
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