UK Inflation Falls to Lowest Level in Two and a Half Years
Quote from VATcal on 17/04/2024, 20:06Consumer price inflation in the UK has fallen to its lowest level in two and a half years, according to figures released by the Office for National Statistics (ONS) today.
The year-on-year inflation rate dropped to 3.2% in March 2024, down from 3.4% in February. This is the lowest level since September 2021, although it is still above the Bank of England's target rate of 2%.
The fall in inflation was primarily driven by a slowdown in food price rises. Prices for food and non-alcoholic beverages dipped to 4%, the lowest level since November 2021. This decrease was attributed to lower meat prices and smaller increases for bread and cereals. Interestingly, the ONS also reported a drop in the price of some bakery goods, including chocolate biscuits and crumpets.
Despite the positive news, the decrease in inflation was slightly lower than economists had predicted. This has led some to be cautious about the possibility of interest rate cuts later this year.
"Inflation eased slightly in March to its lowest annual rate for two-and-a-half years," said ONS chief economist Grant Fitzner. "Once again, food prices were the main reason for the fall, with prices rising by less than we saw a year ago."
The Bank of England has raised interest rates several times in the past year in an effort to combat inflation. While the latest figures offer some encouragement, the Bank has warned that the fight against inflation is not over yet. They predict that prices may start to rise again in the second half of 2024.
Consumer price inflation in the UK has fallen to its lowest level in two and a half years, according to figures released by the Office for National Statistics (ONS) today.
The year-on-year inflation rate dropped to 3.2% in March 2024, down from 3.4% in February. This is the lowest level since September 2021, although it is still above the Bank of England's target rate of 2%.
The fall in inflation was primarily driven by a slowdown in food price rises. Prices for food and non-alcoholic beverages dipped to 4%, the lowest level since November 2021. This decrease was attributed to lower meat prices and smaller increases for bread and cereals. Interestingly, the ONS also reported a drop in the price of some bakery goods, including chocolate biscuits and crumpets.
Despite the positive news, the decrease in inflation was slightly lower than economists had predicted. This has led some to be cautious about the possibility of interest rate cuts later this year.
"Inflation eased slightly in March to its lowest annual rate for two-and-a-half years," said ONS chief economist Grant Fitzner. "Once again, food prices were the main reason for the fall, with prices rising by less than we saw a year ago."
The Bank of England has raised interest rates several times in the past year in an effort to combat inflation. While the latest figures offer some encouragement, the Bank has warned that the fight against inflation is not over yet. They predict that prices may start to rise again in the second half of 2024.
