Inflation eases but still remains above 10% as cost of essential foods hit record high | Business News

The figures overlaying March once more show extra cussed than economists had anticipated, making the prospect of an extra Bank of England rate of interest rise extra possible.

By James Sillars, Business reporter @SkyNewsBiz

The price of inflation has eased barely but still remains above 10%, in accordance with official figures exhibiting record prices for some essential foods.

The Office for National Statistics (ONS) stated the patron costs index (CPI) measure slowed to 10.1% in March from 10.4% the earlier month.

Economists had largely anticipated a determine of 9.8%.

The knowledge represents a slight enchancment within the energy-driven cost of dwelling disaster as gas costs fell again to ranges seen a yr in the past when Russia’s warfare in Ukraine prompted a spike in oil prices.

However, upwards stress remained from family gasoline and electrical energy prices and meals, together with necessities such as bread, milk and eggs.

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Food and non-alcoholic drink inflation was measured at 19.2% by the ONS.

February’s inflation knowledge had already proven a further hit from the salad scarcity that had gripped supermarkets that month, although costs for items such as tomatoes are tipped to fall sharply as the UK rising season gathers tempo.

ONS chief economist Grant Fitzner stated of the easing in general inflation in March: “The most important drivers of the decline had been motor gas costs and heating oil prices, each of which fell after sharp rises on the similar time final yr.

“Clothing, furnishings and family items costs elevated, but extra slowly than a yr in the past.

“However, these had been partially offset by the cost of meals, which is still climbing steeply, with bread and cereal value inflation at a record high.

“The general prices going through enterprise have been largely secure since final summer season, though costs stay high.”

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The newest figures had been launched in opposition to a backdrop of hopes {that a} deceleration in inflation would enable the Bank of England to pause its motion to battle inflation by rate of interest rises.

It has raised Bank price at 11 consecutive conferences since December 2021 in a bid to maintain a lid on value pressures within the financial system.

While policymakers can do nothing about issues like vitality – the primary driver of the inflation disaster – the Bank can look to take demand out of the financial system by elevating borrowing prices.

It may have been inspired by the easing within the headline price of inflation.

But a separate measure closely-watched by the Bank that strips out risky value components, identified as core inflation, remained static at 6.2%.

Employment knowledge launched on Tuesday additionally confirmed that wages continued to creep upwards, albeit at ranges nicely under CPI.

What is driving wages up?

The Bank has beforehand expressed worries that wage rises looking for to fight the hit to family budgets from inflation, which have come into sharp focus through the winter strikes throughout the financial system, threat stoking inflation forward.

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Chancellor Jeremy Hunt responded: “These figures reaffirm precisely why we should proceed with our efforts to drive down inflation so we will ease stress on households and companies.

“We are on monitor to do that – with the OBR (Office for Budget Responsibility) forecasting we’ll halve inflation this yr – and we’ll proceed supporting folks with cost-of-living assist price a median of £3,300 per family over this yr and final, funded by windfall taxes on vitality income.”

His Labour shadow, Rachel Reeves, stated: “The query for households remains as actual as ever – when will they really feel higher off below this Conservative authorities?

“And, why when the cost of living continues to bite, is the government refusing to freeze council tax this year, paid for by a proper windfall tax on oil and gas giants?”

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