Inflation remained persistently high at 2.6 per cent in March, according to official data, presenting a challenging decision for Bank of England policymakers regarding interest rates next month.
The year-on-year rise in consumer price inflation (CPI) was lower than the 2.7 per cent predicted by a Bloomberg poll of economists, as reported by .
The Office for National Statistics (ONS) reported that services inflation reached 4.7 per cent, which could concern policymakers despite a slight decrease from the previous month.
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"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," said ONS chief economist Grant Fitzner.
Chancellor Rachel Reeves stated that the latest figures showed "encouraging signs" that government plans were taking effect.
"I know many families are still struggling with the cost of living and this is an anxious time because of a changing world," she commented.
"That is why the Government has boosted pay for three million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools."
The most recent inflation data released by the ONS will be the last seen by the Bank's rate-setters before they make a crucial interest rate decision on May 8.
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The figure for March suggests that 海角视频 inflation may not fall to the Bank's two per cent target this year as inflation is likely to see a surge in April.
Capital Economics' Ruth Gregory commented on the recent inflation trends, stating: "The dip in CPI inflation from 2.8 per cent in February to 2.6 per cent in March won't be sustained for long, with inflation set to rise to around 3.5 per cent in the coming months," She added, "But we think a weak economy will quash inflation eventually and that the tariff shock has tilted the balance of risks towards lower inflation and faster falls in interest rates."
All eyes now on the Bank of England
Attention is now focused on the Bank of England as economists widely anticipate a reduction in interest rates by 25 basis points at the upcoming decision. The current rate stands at 4.5 per cent, with Governor Andrew Bailey spearheading the Bank's "gradual and careful" strategy towards lowering rates.
Market expectations have factored in up to four cuts this year, largely due to the belief among most economists that President Trump's extensive tariffs will likely exert a deflationary influence on price growth.
Considering factors such as diminished demand, falling energy prices, and an influx of cheaper goods from major economies like China, Oxford Economics has adjusted its forecast for the 2025 inflation rate to three per cent.
However, concerns persist among economists, including Bank deputy governor and rate-setter Sarah Breeden, who worry that increased costs along global supply chains could actually drive 海角视频 prices higher.
Quilter investment strategist Lindsay James expressed that the future path of inflation remains "very uncertain".
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"Nobody quite knows what is going to happen next on President Trump's tariff rollercoaster, and as such the economic environment will be volatile.
"There are specific inflationary pressures for the 海角视频, with the new rates of national insurance now in place on employers and the likely upward impact this will have on prices."
The introduction of higher taxes by Chancellor Rachel Reeves has led firms to increase their prices more than they would have preferred, to preserve profit margins.
The significant pay growth of 5.9 per cent observed in February is expected to have a considerable influence on the decisions made by the Bank next month.
Furthermore, the Monetary Policy Committee's upcoming review, where it may adjust its high inflation forecast for the year – currently at a peak of 3.75 per cent – will be closely monitored.
This projection stands out when compared to the Office for Budget Responsibility (OBR)'s less aggressive estimate of 3.2 per cent.