Britain’s Inflation Rate Drops More Than Expected in March
Official data revealed that Britain’s annual inflation rate dropped more significantly than anticipated in March, providing a positive development for the Labour government.
According to the Office for National Statistics (ONS), the Consumer Prices Index fell to 2.6 per cent, down from 2.8 per cent in February. This drop exceeded analysts’ predictions of a 2.7 per cent decrease and was a notable fall from January’s 3.0 per cent.
The ONS attributed the decline to lower fuel prices and stable food costs compared to the previous year. Finance Minister Rachel Reeves welcomed the decrease but cautioned against complacency, acknowledging that many families still face cost-of-living challenges amid global economic uncertainty, particularly due to US President Donald Trump’s tariffs.
While recent data showed stronger-than-expected UK economic growth in February, concerns remain about the potential impact of the 10 per cent US tariff on British imports. Analysts predict a temporary rise in inflation due to increased UK energy and water bills this month, with some forecasting it to reach around 3.5 per cent. However, falling oil prices due to global trade tensions could mitigate this increase.
The Confederation of British Industry (CBI) highlighted the uncertainty created by the US tariffs, which could both increase and decrease UK inflation. The inflation data strengthens expectations that the Bank of England will cut interest rates at its upcoming May meeting.
