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UK consumer price inflation cooled by less than expected in March, though producer price inflation slowed by more than forecast, official data on Wednesday showed.
According to the Office for National Statistics, the annual rise in consumer prices cooled slightly to 10.1% in March from 10.4% in February. This was less of a slowdown than expected, with FXStreet-cited market consensus calling for UK inflation to fall below 10% to 9.8%.
‘The easing in the annual inflation rate in March 2023 mainly reflected price changes in the transport division, particularly for motor fuels,’ ONS explained. ‘There were also downward effects from housing and household services, furniture and household goods, clothing and footwear, and restaurants and hotels.’
However, these downward movements were partially offset by price increases in food and non-alcoholic beverages, as well as recreation and culture, ONS said.
On a monthly basis, prices edged up 0.8% in March, compared to a 1.1% rise in February. The figure also topped consensus expectations of a 0.5% rise.
Meanwhile, ONS figures also showed annual producer input price inflation cooled to 7.6% in March from an upwardly revised figure of 12.8% in February. Market consensus had been expecting a reading of 9.8%.
‘The largest upward contribution to the annual input inflation rate in March 2023 came from inputs of other parts and equipment...The second-largest contributor to the annual rate came from inputs of home-produced food materials,’ ONS said.
The producer price index is well below its record high of 24.5% last June, ONS noted.
From the previous month, producer input prices rose 0.2%, compared to the revised reading of no change in February. Market consensus had expected a 0.4% fall.
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