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UK inflation falls to 1.6% in March | UK inflation falls to 1.6% in March |
(40 minutes later) | |
The UK inflation rate as measured by the Consumer Prices Index (CPI) fell to 1.6% in March from 1.7% in February, according to the Office for National Statistics (ONS). | The UK inflation rate as measured by the Consumer Prices Index (CPI) fell to 1.6% in March from 1.7% in February, according to the Office for National Statistics (ONS). |
It is the third consecutive month inflation has been below the Bank of England's 2% target rate, and the lowest rate since October 2009. | It is the third consecutive month inflation has been below the Bank of England's 2% target rate, and the lowest rate since October 2009. |
The largest contribution to the fall in the rate came from petrol prices. | The largest contribution to the fall in the rate came from petrol prices. |
The rate of Retail Prices Index (RPI) inflation also fell to 2.5% from 2.7%. | The rate of Retail Prices Index (RPI) inflation also fell to 2.5% from 2.7%. |
Petrol prices were unchanged between February and March, compared with a rise of 2.2p a litre a year earlier. | Petrol prices were unchanged between February and March, compared with a rise of 2.2p a litre a year earlier. |
A smaller rise in the prices of clothing and footwear, compared with last year, also contributed to the drop in the inflation rate. | A smaller rise in the prices of clothing and footwear, compared with last year, also contributed to the drop in the inflation rate. |
It is the sixth consecutive month that the rate of inflation has fallen, marking the longest consecutive fall since modern records began. | |
The drop in the rate of inflation means that the gap between average wage growth and the rise in prices has continued to narrow. | |
Average total earnings, including bonuses, rose 1.4% in the three months to January compared with a year earlier, according to ONS figures released last month. Excluding bonuses, wages grew by 1.3%. | Average total earnings, including bonuses, rose 1.4% in the three months to January compared with a year earlier, according to ONS figures released last month. Excluding bonuses, wages grew by 1.3%. |
The ONS will release its latest figures for average total earnings in the three months to February on Wednesday. | The ONS will release its latest figures for average total earnings in the three months to February on Wednesday. |
On Monday, economic forecasting group the EY ITEM Club predicted average earnings could rise faster than the cost of living as early as this month. | |
BNP Paribas economist David Tinsley said the rate of inflation remained "benign". | |
"This is providing plenty of breathing space for the Bank of England's MPC [Monetary Policy Committee] to re-iterate its intention not to move to policy tightening any time soon," he added. |