UK inflation eases but holds above 10%: data

UK inflation eases but holds above 10%: data

Markets had expected UK inflation to fall below 10 percent in March
Markets had expected UK inflation to fall below 10 percent in March. Photo: Susannah Ireland / AFP/File
Source: AFP

PAY ATTENTION: Enjoy reading our stories? Join YEN.com.gh's Telegram channel for more!

UK inflation slowed slightly last month but held stubbornly above 10 percent, official data showed Wednesday, further fuelling a cost-of-living crisis despite an aggressive series of interest-rate hikes.

The Consumer Prices Index (CPI) rose by a stronger-than-expected 10.1 percent in March, down from 10.4 percent in February, the Office for National Statistics (ONS) said in a statement.

Inflation nevertheless held in double figures on soaring food and housing costs including electricity and gas bills.

Market expectations had been for a drop below 10 percent.

"Inflation eased slightly in March, but remains at a high level," said ONS chief economist Grant Fitzner.

"The main drivers of the decline were motor fuel prices and heating oil costs, both of which fell after sharp rises at the same time last year.

PAY ATTENTION: Follow us on Instagram - get the most important news directly in your favourite app!

Read also

Asian markets down after lacklustre session on Wall Street

"Clothing, furniture and household goods prices increased, but more slowly than a year ago."

However, this was "partially offset by the cost of food, which is still climbing steeply", Fitzner added, noting bread and cereal inflation hit a record high.

The UK's Conservative government, headed by Prime Minister Rishi Sunak, had last month unveiled a budget aimed at tackling a cost-of-living crisis -- which has sparked strikes as many wages fail to keep pace.

Inflation had zoomed to a 41-year peak above 11 percent last October on rocketing energy costs after key gas producer Russia invaded Ukraine.

However, Britain has forecast it will tumble to 2.9 percent by the end of this year.

"These figures reaffirm exactly why we must continue with our efforts to drive down inflation so we can ease pressure on families and businesses," said finance minister Jeremy Hunt in response to Wednesday's data.

"We are on track to do this... and we'll continue supporting people with cost-of-living support."

Read also

Asian markets drop but pare losses after China data

Hunt had in March extended a subsidy on energy bills for a further three months, after the invasion of Ukraine by oil and gas producer Russia sent them surging -- and fuelled rampant global inflation.

The Bank of England has ramped up interest rates 11 times in a row since late 2021 in a bid to bring rocketing consumer prices under control.

The BoE's key rate currently stands at 4.25 percent, the highest level since late 2008.

Yet inflation remains at more than five times the BoE's official target of two percent.

The British central bank's next decision is due in May.

"The (inflation) drop is too modest for the (BoE) to stop raising rates; we now look for a final 25 basis-point hike," commented Pantheon Macroeconomics analyst Samuel Tombs.

New feature: Сheck out news that is picked for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.