UK inflation stuck at 3.5-year high: data

UK inflation stuck at 3.5-year high: data
Britain's Prime Minister Theresa May speaks during a joint news conference with her Turkish counterpart Binali Yildirim (not pictured) in Ankara, Turkey, January 28, 2017. REUTERS/Umit Bektas

Rising clothing and food prices kept British annual inflation at its highest level in three and a half years in March, official data showed on Tuesday.

The 12-month inflation rate stood at 2.3 percent last month, the same rate as in February, the Office for National Statistics (ONS) said in a statement.

That was broadly in line with expectations. The last time British inflation was higher was in September 2013.

The impact of higher clothing and food prices, along with alcohol and tobacco, were largely offset by lower transport costs — and air fares in particular.

“The costs of raw materials and the price of manufactured goods leaving factories were both little changed, as falling fuel prices helped stem further rises,” said ONS statistician Jonathan Athow.

The pound jumped against the dollar immediately after the data release, but has since handed back gains.

Inflation has now stood above the Bank of England’s 2.0-percent target level for the last two months.

“March’s headline inflation figure in the UK … flattened out at 2.3 percent and the Bank of England is unlikely to change its unhurried approach to raising headline interest rates from their current record low of 0.25 percent,” noted AJ Bell investment director Russ Mould.

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