UK inflation steady at 2.3%

Rising clothing and food prices kept British annual inflation at its highest level in three and a half years in March, official data showed on Tuesday.

The Office for National Statistics (ONS) said in a statement the 12-month inflation rate stood at 2.3 percent last month, the same rate as in February.

That was broadly in line with expectations. The last time British inflation was higher was in September 2013.

The impact of higher clothing and food prices along with alcohol and tobacco were largely offset by lower transport costs and air fares in particular.

ONS statistician Jonathan Athow said the costs of raw materials and the price of manufactured goods leaving factories were both little changed, as falling fuel prices helped stem further rises.

The pound jumped against the dollar immediately after the data release, but has since handed back gains. Inflation has now stood above the Bank of England’s 2.0-percent target level for the last two months.

AJ Bell investment director Russ Mould noted March’s headline inflation figure in the UK, flattened out at 2.3 percent and the Bank of England is unlikely to change its unhurried approach to raising headline interest rates from their current record low of 0.25 percent.

 

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