The data was released by the Office for National Statistics

Inflation continues to decline but 'still a lot of volatility in the inflation path ahead'




The Office for National Statistics (ONS) has revealed that the consumer prices index (CPI) has fallen to 3.2% in the 12 months to March 2024, down from 3.4% in February.

CPI rose by 0.6% month-on-month in March 2024, compared with a rise of 0.8% in March of last year.

The CPI including owner occupiers' housing costs (CPIH) remained steady at 3.8% in the 12 months to March 2024, the same as February.

According to the ONS, the largest downward contributors to CPIH and CPI came from food, with prices rising by less than a year ago, while the largest upward contributor was motor fuels, with prices rising this year but falling a year ago.

Industry professionals have reacted to the latest inflation data:

Neil Rudge, head of enterprise at Shawbrook:

"While a dip in April's inflation rate is welcome news, SMEs will remain cautious, high costs for materials and labour continue to squeeze profit margins, and the uncertainty surrounding future inflation makes planning for the coming year a challenge.

"While some inflation allows businesses to raise prices without significant resistance, potentially offsetting cost increases, a continued squeeze on consumer spending could dampen demand.

“To navigate this environment, SMEs should remain adaptable, focusing on operational efficiency to maintain profitability, strategically adjusting prices to account for rising input costs while minimising customer impact will also be crucial.

“The impact of inflation will vary by industry and business model, but by staying informed and proactive, SMEs can emerge stronger.

“We’re seeing many still embracing their growth aspirations and exploring specialist funding options to secure capital for expansion in this inflationary environment."

Daniel Austin, CEO and co-founder at ASK Partners:

“Decreasing inflation suggests that the Bank of England (BoE) is likely to maintain interest rates for an extended period, particularly considering the signs of economic recovery we've witnessed.

“This all points to a positive domestic story of an economy exiting a mild recession but does mean that pressure will remain on those servicing debt and with ongoing global market uncertainty surrounding the Middle East crisis, the coming months are set to be shaky.

 "In the real estate sector and as property loan extensions expire, borrowers will face the choice of injecting fresh capital, returning assets to lenders, or selling in a soft market.

“The assets hitting the market will kickstart the cycle and offer opportunities for capital-endowed buyers, who view this as an opportune moment to acquire assets at significant discounts.”

Sanjay Raja, chief UK economist at Deutsche Bank Research:

“There is still a lot of volatility in the inflation path ahead, especially with next month's all-important April price data — and more importantly, today’s data was a stark reminder that while a 2% CPI print may be within reach, it won’t be a smooth descent to target, a bumpy path ahead remains our base case.

“We continue to see headline CPI slipping (slightly) below target in Q2-24, but bumping back up in the second half of the year.

“A sustained return to 2% inflation, we think, won’t happen until maybe spring next year.”

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