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Inflation eased again final month, paving the best way for rate of interest cuts subsequent month in a lift for Rachel Reeves.
Costs, as measured by the buyer costs index (CPI), rose by 2.6pc within the 12 months to March, in response to the Workplace for Nationwide Statistics (ONS), down from 2.8pc in February.
The drop is greater than analysts’ expectations of a fall to 2.7pc.
Statisticians stated the autumn was pushed by a drop in petrol and diesel costs, as escalating commerce tensions pushed down expectations for world development.
The value of a litre of petrol fell by 1.6p per litre final month to only over £1.37, down from slightly below £1.45 in March 2024. Diesel costs additionally fell by 1.6p per litre to £1.45 pence per litre final month.
Grant Fitzner, the ONS’s chief economist, stated: “Inflation eased once more in March, pushed by quite a lot of components together with falling gas costs and unchanged meals prices in contrast with the worth rises we noticed this time final 12 months.
“The one important offset got here from the worth of garments, which rose strongly this month, following the weird lower in February.”
The Financial institution of England is anticipated to chop rates of interest subsequent month in a lift for households. Economists have been pricing in decrease borrowing prices because of Donald Trump’s commerce warfare, which some imagine might set off a worldwide recession.
Rachel Reeves, the Chancellor welcomed the figures whilst she acknowledged it was “an anxious time due to a altering world”.
She stated: “Inflation falling for 2 months in a row, wages rising quicker than costs and optimistic development figures are encouraging indicators that our Plan for Change is working, however there may be extra to be achieved.”
