By Ed Frankl
The U.K.’s inflation rate dipped less than expected in March, holding above 10%, as food and household-energy prices remained high, indicating that the Bank of England may need to act further to curb stubbornly high costs.
Consumer prices increased 10.1% in March compared with the same month a year earlier, down from February’s 10.4% on-year rise, data from the Office for National Statistics showed Wednesday.
Economists expected inflation to decline to 9.8%, according to a poll by The Wall Street Journal.
Climbing food inflation–19.6% on year in March–contributed to the rise in the headline figure, the ONS said. Household-elecriticty and gas prices also led higher inflation, while motor-fuel prices increases eased, it said.
Core consumer prices–a measure that excludes the volatile categories of food and energy–remained high in March, rising 6.2% on year, the same rate as in February, suggesting underlying inflation is staying hot, putting pressure on the Bank of England in its battle to stem inflation. Economists polled expected a 5.9% increase.
Despite the still-high inflation figure by historical standards–it is close to October’s 41-year high of 11.1%–inflation is expected to fall in the rest of 2023. The U.K.’s Treasury chief Jeremy Hunt said at last month’s budget announcement that inflation was expected to fall to 2.9% by the end of 2023.
Write to Ed Frankl at email@example.com