Inflation eased slightly in March to 3.2%, its lowest annual rate for two and a half years, with the Office for National Statistics (ONS) crediting food and drink prices for the slowdown.
The decreasing inflation rate was less than expected due to rising fuel prices. City economists and the Bank of England had forecast a larger decline to 3.1%. Persistent high inflation could force the Bank to hold off from cutting interest rates until later this year.
However, the slow down has been welcomed by the British Retail Consortium. Kris Hamer, director of insight at the BRC, commented: “Falling inflation rates for clothing and household furniture and equipment were key in driving down the headline figure.
“Consumers benefitted as food inflation fell once again, marking twelve months of consecutive drops. This was helped by falls in the cost of a roast dinner as the price of beef, pork and potatoes all fell.
“As some cost pressures in the supply chain begin to ease, retailers have worked hard to pass on savings where they can and offering their customers the best value for money. In a year of elections, politicians, both locally and nationally, must recognise retail’s role in the economy, providing jobs and investment in every corner of the country and helping deliver government policy through its scale and reach.
“Competition between retailers has played a key role in bringing down inflation for the public and it is vital that politicians consider the inflationary impact of new policies which might reverse this progress and result in higher prices for consumers in the long run.”
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