Rachel Reeves was handed a respite today as inflation came in slightly lower than expected.
Headline CPI was 2.6 per cent in March, down from 2.8 per cent in February and better than the 2.7 per cent analysts had pencilled in.
It could give the Bank of England more cover to cut interest rates next month, in a boon for hard-pressed mortgage-payers.
However, experts are warning that prices are set to gather pace again, with pain from energy bills, Labour’s Budget and Donald Trump‘s trade war still to feed through.
ONS Chief Economist Grant Fitzner said: ‘Inflation eased again in March, driven by a variety of factors including falling fuel prices and unchanged food costs compared with the price rises we saw this time last year.
Headline CPI was 2.6 per cent in March, down from 2.8 per cent in February and better than the 2.7 per cent analysts had pencilled in
Rachel Reeves was handed a respite today as inflation came in slightly lower than expected
‘The only significant offset came from the price of clothes, which rose strongly this month, following the unusual decrease in February.’
It represents a second consecutive month that the annual rate of inflation has eased.
However, the level remains above the 2 per cent target set by the Bank of England.
Threadneedle Street has said inflation is likely to increase through this year and peak at around 3.7 per cent later this summer.
Today’s figure is the last inflation reading the Bank’s monetary policy committee will get before they vote on whether to reduce interest rates – currently sitting at 4.5 per cent – at their meeting next month.
