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The UK Consumer Prices Index (CPI)
annual rate of inflation fell to 4%, down from 4.4% in February.
The decline was mainly triggered by a record monthly fall in the price of food
and non-alcoholic drinks, which dipped 1.4%, compared with a rise last year. Retail Prices Index (RPI) inflation - - which includes mortgage interest
payments - - dipped to 5.3% from 5.5% in February.
The fall eases pressure on the Bank of England to raise interest rates.
The Office for National Statistics (ONS)
said supermarkets had reduced their prices in March.
The British Retail Consortium (BRC) also said increased competition at a time
when consumers were spending less meant margins were being squeezed.
A record 40% of supermarket sales were discounted or part of a promotional
offer, it added.
The ONS said the CPI rose by 0.3% between February and March this year compared
with a rise of 0.6% a year ago. The 0.3% increase this year is within the normal
range for a February to March movement though the 0.6% in 2010 was a record.
Between 1996 and 2009, the 1-month change between February and March varied
between increases of 0.2% and 0.5%.
The most significant upward contributions to the 1-month change in the CPI
between February and March 2011 came from:
transport: prices, overall, rose
by 1.2% between February and March. The largest upward effects came from
fuels and lubricants where pump prices rose by 2.7% to reach record levels
of £1.32 for petrol and £1.38 for diesel. There were also upward effects
from air transport and the purchase of second-hand cars;
furniture, household equipment
and maintenance: the largest upward effect came from furniture and
furnishings where prices rose by 3.7%.
The most significant downward
contribution to the 1-month change in the CPI between February and March 2011
food and non-alcoholic
beverages: prices, overall, fell by 1.4%, the largest ever fall for a
February to March period. The downward effects were widespread with the most
significant coming from fruit, and bread and cereals. Fruit prices, overall,
fell by 4.7%, a record for a February to March period. Bread and cereal
prices, overall, fell by 2.6%, the largest ever monthly fall.
UK Inflation, a ‘Temporary Blip’: Economist
“I’m still pretty confident we’ll get to nearly 5% year-on-year inflation later this year,” Alan Clarke, UK economist at BNP Paribas, told CNBC. “I think it is temporary,” he added, “given the earlier indications we’ve got, we’re probably going to accelerate again next month”: