Official figures from the Office for National Statistics (ONS) show the inflation rate in the UK eased more than expected in March and for the second month in a row.
The Consumer Price Index (CPI) measure fell to 2.6% last month, down from 2.8% in February and 3% in January. Economists had expected the rate in March to be 2.7%.
The inflation decrease was mainly driven by lower fuel costs and falling recreation and culture prices.
Food and non-alcoholic beverages inflation also eased from 3.3% to 3.0%. In the supermarkets, confectionery prices saw the biggest falls, although this was partially offset by the rising cost of milk, cheese and eggs.
Looking ahead, analysts warned that the inflation drop is likely to be short-lived as a raft of bill rises kicked in at the start of April. Energy, water, and council tax bills rose throughout the UK at the start of this month.
Meanwhile, Michael Saunders, senior advisor at Oxford Economics, noted that Trump’s global tariffs could also affect the figures in the months ahead. “We may get a diversion of cheap exports which might have otherwise gone to the US, will start to come to Europe and the UK,” he said.
Saunders added that another side-effect of the US-led trade war would be a hit to global growth, which causes oil prices to fall, which will feed through to lower petrol prices in the UK.
NAM Implications:
- In other words, no let-up in market conditions.
- With further cost increases that will need translating into higher shelf prices.
- A point not lost on the general voter-consumer….
