Inflation drops to lowest rate in two years

Apr 17, 2024

UK inflation fell to 3.2% in the year to March, the lowest rate in over two years, down from 3.4% in February, as per the Office for National Statistics (ONS)

While inflation has been on a downward trajectory since peaking at 11.1% in late 2022, prices are still rising, albeit at a slower pace. Notably, the price increases for most food items have moderated, although bread and cereals saw minor rises. A significant drop in meat prices, particularly pork products, contributed to the slower inflation rate.

Food and energy costs had previously driven the UK's high inflation, exacerbated by increased demand post-COVID. In March last year, food and non-alcoholic drinks inflation soared to 19.2%, the highest level since the 1970s. Meanwhile, furniture and household goods prices dropped by 0.9% over the past year.

With the next Bank of England (BoE) interest rate decision due on 9 May, the central bank continues to raise rates to curb inflation and meet its 2% target.

Core inflation, excluding volatile energy and food prices, also decreased to 4.2% in March. The upcoming April inflation figures are expected to decline further due to a lower energy price cap, despite persistently high household direct debits.

Talk to us about your finances.