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UK inflation holds steady at 2.3 percent

Staff Writer |
UK inflation eased slightly on a monthly basis in March but remained above the Bank Of England's 2% target rate for a second month, with a rise in food prices offset by lower air fares due to a later Easter this year.

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The Bank of England's Monetary Policy Committee is keeping a close eye on inflation as it weighs various economic factors in determining whether to lift interest rates from their historic low, with wage data on Wednesday another key metric.

The headline consumer prices index for March remained 2.3% higher than last year for a second consecutive month, as forecast.

On a monthly basis CPI rose 0.4%, down from the 0.7% jump in February but more than the 0.3% increase the market expected.

Core CPI, which excludes more volatile prices like fuel and food, eased off to 1.8% from 2% a month ago. Food price inflation rose to 1.6% from 0.3%.

The Office for National Statistics also revealed that CPIH, the newly favoured official figure which includes owner-occupiers' housing costs, also stood fast at 2.3% as predicted.

Rises in food, drink and clothing prices in March were offset by air fares, which fell slightly but last year rose substantially thanks to the timing of Easter, the ONS said.

With Easter falling in March last year but on 16 April this year, air fare inflation fell by 3.9% on the month, compared with a hefty 22.9% rise in the same month a year ago, which knocked 0.2 percentage points off CPI in March.


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