UK inflation in March has surprised market pundits by rising at a greater rate than expected. The UK’s Consumer Prices Index (CPI) rose by 0.2% during March, or 0.5% for the last 12 months. The annual figure was expected to be 0.4% but the higher number was driven by rises in clothing and airfares which ANZ pointed out had been distorted by this year’s early Easter. The rise in consumer inflation was tempered by falls in food prices, while petrol prices rose less than in February.
The UK’s Office of National Statistics noted how the rate has increased since October 2015 but pointed out it was “still relatively low in the historical context.” Core consumer inflation figures, which strip out alcohol, tobacco, energy and food price changes, rose by 1.5% over the last 12 months.