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

The speed of inflation has eased barely however nonetheless stays above 10%, in keeping with official figures exhibiting file prices for a lot of important meals.

The Workplace for Nationwide Statistics (ONS) mentioned 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 info represents a slight enchancment within the energy-driven cost of living crisis as gas costs fell again to ranges seen a 12 months in the past when Russia’s war in Ukraine prompted a spike in oil prices.

Nevertheless, upwards strain remained from family gasoline and electrical energy and meals, together with necessities corresponding to bread, milk and eggs.

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

Different elements behind the spike had been highlighted in February’s inflation data, particularly the salad scarcity that had gripped supermarkets that month.

A crumb of consolation is that costs for items corresponding to tomatoes and cucumbers are tipped to fall sharply because the UK rising season gathers tempo.

ONS chief economist Grant Fitzner mentioned of the easing in total inflation in March: “The principle 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 12 months.

“Clothes, furnishings and family items costs elevated, however extra slowly than a 12 months in the past.

“Nevertheless, these had been partially offset by the price of meals, which remains to be climbing steeply, with bread and cereal value inflation at a file excessive.

“The general prices dealing with enterprise have been largely secure since final summer time, though costs stay excessive.”

The most recent figures had been launched towards a backdrop of hopes {that a} deceleration in inflation would enable the Financial institution of England to pause its motion to battle inflation by means of rate of interest rises.

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

Whereas policymakers can do nothing about issues like power – the primary driver of the inflation disaster – the Financial institution can look to take demand out of the financial system by elevating borrowing prices.

It’s going to have been inspired by the easing within the headline fee of inflation.

However a separate measure closely-watched by the Financial institution that strips out unstable value parts, often known as core inflation, remained static at 6.2%.

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

The Financial institution has beforehand expressed worries that wage rises looking for to fight the hit to family budgets from inflation, which have come into sharp focus throughout the winter strikes throughout the financial system, danger 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 are able to ease strain on households and companies.

“We’re on monitor to do that – with the OBR (Workplace for Price range Accountability) forecasting we are going to halve inflation this 12 months – and we’ll proceed supporting folks with cost-of-living help price a median of £3,300 per family over this 12 months and final, funded by means of windfall taxes on power income.”

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

“And, why when the price of residing continues to chew, is the federal government refusing to freeze council tax this 12 months, paid for by a correct windfall tax on oil and gasoline giants?”