LONDON — British consumer price inflation fell to 10.1 per cent in March from February’s 10.4 per cent, figures from the Office for National Statistics showed today.
Economists polled by Reuters had forecast that the annual CPI rate would drop to 9.8 per cent in March, moving further away from October’s 41-year high of 11.1 per cent but still eating into the spending power of workers whose pay is rising by less.
Despite falling in March, Britain’s inflation rate was the highest in Western Europe.
Last month the Bank of England said it expected inflation to “fall significantly” in the second quarter. In February, the BoE had forecast March inflation of 9.2 per cent.
While inflation is likely to fall naturally as the sharp increases in energy prices seen last year fall out of the annual comparison, the BoE is trying to judge how fast it will decline.
Financial markets on Tuesday pointed to a roughly 80 per cent chance that the BoE will raise interest rates next month.
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