17 April: Lower-Than-Expected Fall Cools Rate Cut Hopes
Annual inflation dipped to 3.2% in the year to March 2024, its lowest level in more than two years, down from 3.4% recorded a month earlier, Andrew Michael writes.
Today’s announcement, from the Office for National Statistics (ONS), sees prices fall by less than hoped for by market-watchers, with some saying it could defer a cut in the Bank of England Bank Rate from the summer to the autumn.
But it will be welcomed by both individuals and businesses alike who endured a prolonged period of soaring prices lasting through 2022, when the inflation figure reached double-digit levels and stayed there well into last year.
The monthly reading of the Consumer Prices Index (CPI) from the ONS shows that prices rose by 0.6% last month compared with a rise of 0.8% in March 2023.
According to the ONS, the largest downward contribution to today’s headline figure came from food, with prices rising less than a year ago. Set against this was the rising cost of motor fuel.
Core CPI, which leaves out volatile data covering energy, food, alcohol and tobacco, stood at 4.7% in the year to March, down from 4.8% a month earlier.
CPI including owner-occupier costs (CPIH) stood at 3.8% in the 12 months to March 2024, unchanged from a month earlier. On a monthly basis, CPIH rose by 0.6% in March this year, compared with a rise of 0.7% for the same month in 2023.
Grant Fitzner, ONS chief economist, said:…
