UK inflation unexpectedly remained in double digits in March as households continued to grapple with soaring food and energy bills.
The Consumer Price Index (CPI) rose by an annual 10.1%, according to the Office for National Statistics, above a consensus projection of 9.8% in a Reuters poll of economists. This is a slight dip from the unexpected jump to 10.4% of February, which broke three consecutive months of declines since October’s 41-year high of 11.1%.
On a monthly basis, CPI inflation was 0.8%, above a Reuters consensus of 0.5% and down from the 1.1% of February. The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 8.9% in the 12 months to March 2023, down slightly from 9.2% in February but well above expectations.
Core CPIH, which excludes volatile food, energy, alcohol, and tobacco prices, rose by 5.7% over the 12 months, unchanged from February’s annual climb – which will be a concern for the Bank of England.
“The largest upward contributions to the annual CPIH inflation rate in March 2023 came from housing and household services (principally from electricity, gas and other fuels), and food and non-alcoholic beverages,” the ONS said in the Wednesday report.
As British households continue to contend with high food and energy bills, workers across a range of sectors have launched mass strike action in recent months amid disputes over pay and conditions.
The UK finance minister, Jeremy Hunt, said the Wednesday figures reaffirm why the government must continue efforts to drive down inflation. “We are on track to do this – with the OBR (Office for Budget Responsibility) forecasting we will halve inflation this year – and we’ll continue supporting people with cost-of-living support worth an average of £3,300 per household over this year and last, funded through windfall taxes on energy profits,” Hunt said in a statement.
However, analysts have warned that while inflation may be peaking, prices are unlikely to fall significantly. The ongoing supply chain disruptions, along with the continued surge in demand, may keep inflation elevated for longer. The Bank of England is closely monitoring the situation and is expected to maintain its current monetary policy for the time being.
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Consumer price inflation in Pakistan recorded at 35.37% in March 2023