UK inflation slows by less than expected to 3.2% in March
"Headline inflation took another small step on the path back to target," Jake Finney, an economist at PwC UK, said, adding pressure would grow on the BoE to cut interest rates if inflation continued to fall.
British consumer price inflation slowed by less than expected to a two-and-a-half-year low of 3.2 per cent in annual terms in March, down from a 3.4 per cent increase in February, the Office for National Statistics said on Wednesday.
The Bank of England - which has an inflation target of 2 per cent - and economists polled by Reuters had forecast an annual rate of 3.1 per cent.
"Headline inflation took another small step on the path back to target," Jake Finney, an economist at PwC UK, said, adding pressure would grow on the BoE to cut interest rates if inflation continued to fall.
"However, the Bank is likely to want more conclusive evidence that we have achieved a sustainable return to target before they pivot to rate cuts."
The slowdown in Britain's inflation rate contrasts with an acceleration of headline price growth in the United States which rose for a second month in a row to 3.5 per cent, according to data published last week.
Sterling rose against the dollar and euro immediately after the figures were published.
Core inflation, which excludes energy, food and tobacco prices, also slowed to 4.2 per cent from 4.5 per cent in February. The Reuters poll had pointed to a reading of 4.1%.
Services inflation, which the BoE also watches closely, eased slightly to 6.0 per cent from 6.1 per cent, the ONS said.
The ONS said a slowdown in food prices was the main contributor to the decrease in headline inflation.
The prices of food and non-alcoholic beverages increased by 4 per cent over the 12 months to March, their weakest increase since November 2021.
"Once again, food prices were the main reason for the fall, with prices rising by less than we saw a year ago," ONS chief economist Grant Fitzner, said.
"Similarly to last month, we saw a partial offset from rising fuel prices."
Catch the latest stock market updates here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
Top 7 Large and Mid Cap Mutual Funds with Best SIP Returns in 5 Years: No. 1 fund has turned Rs 15,000 monthly SIP investment into Rs 20,54,384; know about others
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
01:36 PM IST