UK inflation falls to 2.6% as pressure grows on Bank of England to cut interest rates
16 April 2025, 07:10 | Updated: 16 April 2025, 08:25
UK inflation slowed down for the second month in a row in March on the back of falling petrol prices, according to official figures.
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The Office for National Statistics (ONS) said the rate of Consumer Prices Index (CPI) inflation eased to 2.6% for the month, from 2.8% in February.
Chancellor Rachel Reeves welcomed the 'encouraging' news, which could give the Bank of England more cover to cut interest rates next month.
But analysts say the fall may only be temporary, with a spike predicted in April due to rising bills and higher business costs taking hold.
Grant Fitzner, chief economist at the Office for National Statistics (ONS) said: 'Inflation eased again in March, driven by a variety of factors including falling fuel prices and unchanged food costs compared with the price rises we saw this time last year.
'The only significant offset came from the price of clothes which rose strongly this month.'
A drop in recreation and culture prices also helped to drive inflation down - as toys, games, and hobbies fell particularly sharply.
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Inflation still remains above the 2% target set by the Bank of England and is likely to increase through this year, peaking at around 3.7 per cent later this summer.
Wages also continue to outpace inflation, with the latest ONS data showing that the average rise in salaries was 5.9%.
Reflecting on the latest inflation figures, Ms Reeves said: "Inflation falling for two months in a row, wages growing faster than prices and positive growth figures are encouraging signs that our Plan for Change is working, but there is more to be done.
"I know many families are still struggling with the cost of living and this is an anxious time because of a changing world.
"That is why the Government has boosted pay for three million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools."
