The headline measure, the Consumer Prices Index (CPI), dropped from 3.4% to 3.2% in March compared with a consensus forecast of 3.1%. Slower food inflation of 4% was the main reason behind the fall.
Core inflation, which does not include "volatile" components such as food and energy and is closely watched by the Bank's Monetary Policy Committee (MPC), fell from 4.5% to 4.2%.
However, services sector inflation only dropped from 6.1% to 6%, a smaller dip than the markets had pencilled in.
Another key measure tracked by the MPC, the rate of wage increases, is only slowly coming down. ONS figures this week showed wages still rising at 6%, far higher than the MPC will be comfortable with.
The disappointing "miss" immediately sent financial markets scrambling to reassess their projections of the timing of the first move on rates by the MPC.
This story is from the April 17, 2024 edition of Evening Standard.
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This story is from the April 17, 2024 edition of Evening Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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