UK inflation dips to 3.2%

The consumer price index (CPI) in the United Kingdom (UK) rose by 3.2 percent in the 12 months to March, the Office for National Statistics (ONS) said on Wednesday, reported Xinhua.

This was down from 3.4 percent in February and well below its recent peak of 11.1 percent in October 2022, which was the highest rate in over 40 years.

"Inflation eased slightly in March to its lowest annual rate for two and a half years," said Grant Fitzner, chief economist of the ONS.

"Food prices were the main reason for the fall, with prices rising by less than we saw a year ago. Similarly to last month, we saw a partial offset from rising fuel prices," Fitzner noted.

Prices for food and non-alcoholic beverages rose by 4 percent in the year to March 2024, the lowest annual rate since November 2021, according to the ONS data.

Core CPI, which excludes energy, food, alcohol and tobacco, rose by 4.2 percent in the 12 months to March 2024, down from 4.5 percent in February.

"This fall in the annual CPI inflation rate was expected, given base effects from the large energy and food price increases observed in March 2023," said the think tank National Institute of Economic and Social Research (NIESR), noting that inflation will keep falling in the first half of 2024.

However, the NIESR pointed out that the pace at which inflation softened in March was slower than expected, and core inflation and services inflation also remained elevated.

"As a result, we think the Bank of England may need to exercise some caution in its expected upcoming monetary loosening," said the NIESR.