UK Inflation Shows Surprise Fall In March

The annual rate of inflation in Britain fell unexpectedly to 1.1% during March taking it further below the Bank of England’s 2.0% target, according to the latest data from the Office of National Statistics.It had been expected that the Government’s preferred consumer prices index (CPI) would remain unchanged from February’s figures of 1.3%. The decline attributed to transport costs, with petrol and diesel prices rising more slowly than last year.

Meanwhile, the UK’s previously targeted underlying Retail Prices Index rate of inflation, which excludes mortgage repayments, fell to 2.1% in March, down from 2.3% in the previous month.

The headline rate of RPI inflation, which excludes mortgage interest payments, rose to 2.6%, up from 2.5% in February.

The fall in inflation may make it less likely that the Bank of England will raise interest rates at its next meeting. It is thought the Bank is planning to raise rates to keep a cap on surging house prices and personal debt.

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