UK inflation cools to 10.1% in March: ONS

LONDON - The United Kingdom's consumer price index rose by 10.1 percent in the 12 months to March, down from 10.4 percent in February, the Office for National Statistics (ONS) said on Wednesday.

"Inflation eased slightly in March, but remains at a high level. The main drivers of the decline were motor fuel prices and heating oil costs, both of which fell after sharp rises at the same time last year," ONS Chief Economist Grant Fitzner noted.

Clothing, furniture and household goods prices increased, but more slowly than a year ago, Fitzner added. "However, these were partially offset by the cost of food, which is still climbing steeply, with bread and cereal price inflation at a record high."

The overall costs facing business had been largely stable since last summer, although prices remained high, Fitzner said.

The UK has been in the grip of high inflation for more than a year, as the annual rate once hit a 41-year high of 11.1 percent in October 2022. British households have felt the squeeze amid a worsening cost-of-living crisis. Widespread strikes broke out in summer 2022 and are still underway in disputes over pay.

"Inflation should continue to fall over the rest of this year, thanks to lower energy prices and base effects unwinding," said Alpesh Paleja, lead economist at the Confederation of British Industry.

"But with the CPI rate set to stay above the Bank of England's target, this will still be a tough year for many households -- in particular, the strength in food price inflation will continue to have a big impact on people's pockets," Paleja added.