The rate of inflation has fallen to its lowest level in two-and-a-half years, according to the latest figures by the Office for National Statistics (ONS).
The consumer prices index (CPI) climbed by 3.2% in the 12 months to March 2024, a slight decrease from 3.4% in February.
The annual rate in March 2024 was the lowest since September 2021, when it was 3.1%, and is well below the peak of 11.1% in October 2022.
Monthly, CPI rose by 0.6% in March 2024, compared with a 0.8% month-on-month increase in March 2023.
The largest fall in inflation came from food and non-alcoholic beverages, as it rose 4% in the year to March, down from 5% in February. This is the lowest annual rate since November 2021.
Mckinsey & Company partner Boudewijn Driedonks said: “There is hope the UK is slowly but steadily approaching sustainable levels, even if core inflation remains high. After the surprise rise in US inflation, a second consecutive fall in the UK headline rate will be a relief.
“Falls in closely watched food price inflation will be particularly welcomed at a time when price increases in services prove to be sticky. Households may even start to feel that the food inflationary squeeze is easing up, as prices on the shelves increase at the lowest rate in months.
“While inflation appears to be heading in the right direction and the latest activity indices signal the end of contraction of the UK economy, market conditions remain fragile.
“While the services industry is growing, manufacturing is not, and consumers continue to pay high prices. Companies will want to navigate this year carefully, doubling down on pockets of growth, and benefiting from easing input prices where possible. For the consumer, finally, there is some reason to be more optimistic about what’s ahead.”
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