Inflation remains above 10% in March

Despite easing slightly, inflation remained above 10% in March thanks to food and drink costs reaching a 45-year high, according to the latest figures from the Office for National Statistics (ONS). The ONS found that the Consumer Prices Index (CPI) rose by 10.1% in the 12 months to March 2023, down from 10.4% in February. The largest downward contributions to the monthly change in CPI annual rates came from motor fuels, and housing and household services (particularly liquid fuels), partially offset by upward contributions from food, and recreation and culture. The prices of food and non-alcoholic beverages rose by 19.2% in the year to March 2023, up from 18.2% in February. The ONS said that indicative modelled estimates suggest that the rate would have last been higher in August 1977, when it was estimated to be 21.9%. The largest upward effect came from bread and cereals, where prices rose in the month to March 2023 but fell a year earlier, leading to an annual rate of 19.4%. This is the highest annual rate for bread and cereals on record. However, there were also downward effects from housing and household services, furniture and household goods, clothing and footwear, and restaurants and hotels. ONS chief economist Grant Fitzner said: “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. Clothing, furniture and household goods prices increased, but more slowly than a year ago. “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 have been largely stable since last summer, although prices remain high.”