UK Inflation remains unchanged at 2.3%

UK Inflation remained unchanged in March at 2.3%, still the highest level since September 2013. Stat's released this morning by the Office for National Statistics (ONS), revealed that prices were 0.4% higher in March, whereas the annual inflation number , which strips out energy and food prices, fell to 1.8% from a high of 2% in February.

The latest measure of inflation CPIH (including housing costs) – also remained unchanged at 2.3% in March, in line with analysts expectations after energy and food prices were mainly responsible for pushing up the cost of the UK’s inflation basket to above the Bank of England’s 2% target.

The Bank of England anticipates that the current weakness in Steling, will push inflation to as high as 3% before the end of the year.

In the days leading up to the release, analysts were divided over the impact of rising global food costs on Britain’s cost of living. Barclays expected a March CPI figure of 2.6% while analysts at RBC Capital Markets forecast a dip to 2.2%.

ONS commented that higher food and clothing prices were offset by a slight decline in air fares in March 2017 compared to last year, due to the later timing of Easter.

Since Brexit, the UK’s inflation rate has increased steadily, rising from 0.9% a month after the referendum. During that time, the pound has fallen nearly 17% against the US dollar. “The full impact of sterling’s devaluation is still feeding through”, said Ian Kernohan, economist at Royal London Asset Management.

Source: ONS

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