LONDON – British consumer price inflation fell to 10.1 percent in March from February’s 10.4 percent, figures from the Office for National Statistics showed on Wednesday.
Economists polled by Reuters had forecast that the annual CPI rate would drop to 9.8 percent in March, moving further away from October’s 41-year high of 11.1 percent but still eating into the spending power of workers whose pay is rising by less.
Despite falling in March, Britain’s inflation rate was the highest in Western Europe.
Last month the Bank of England said it expected inflation to “fall significantly” in the second quarter. In February, the BoE had forecast March inflation of 9.2percent.
While inflation is likely to fall naturally as the sharp increases in energy prices seen last year fall out of the annual comparison, the BoE is trying to judge how fast it will decline.
Recent indicators have looked mixed on that front, with data on Tuesday showing stronger-than-expected wage growth. Business surveys however show cooling cost and selling price pressure.
Financial markets on Tuesday pointed to a roughly 80 percent chance that the BoE will raise interest rates next month.
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