UK inflation fell to 2.6% in March, increasing pressure on Bank of England policymakers next month.
Price growth was lower than the expected rise in April as households began to pay higher council taxes and utility bills and pay the uncertain outlook brought about by Donald Trump’s tariff war.
Last month’s reading was below The city forecast for a decline is 2.7%. This is after the consumer price index fell in February and then down from 3% in January.
The National Bureau of Statistics (ONS) said lower fuel prices and flat-rate costs for recreation and cultural activities reduced inflation, offset by rising prices for clothing and footwear. Food prices were a factor that reduced price growth after flattening in March compared to price increases in the same month last year.
The average gasoline price fell 1.6 PA litre between February and March, from 137.5 PA litres in March 2025 to 137.5 PA litres in March 2025, ONS said.
Before Donald Trump’s tariff announcement this month, analysts predicted that inflation would start to rise after April, peaking at around 4% in the summer before returning to next year.
But the US President’s trade war has raised questions about the CPI’s predictions. This could peak at a lower rate if China is allowed to dump goods in Europe, which was previously doomed by the US.
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Pressure has been built on policymakers at the Bank of England, and will cut interest rates when they meet next month. One of the former lieutenant governors, Charlie Bean, said last week that tariff uncertainty should ensure that banks secure inflation concerns and cut borrowing costs by at least half.
