Rising prices at three-year high despite pause

Rising inflation paused in March, staying at 2.3%, as the later Easter this year suppressed price increases.

Official data from the Office for National Statistics showed the Consumer Prices Index (CPI) stayed at the same level as February, ending a run of four consecutive months of growth. It is the highest level since September 2013 and economists still expect inflation could climb to 3% in the months ahead.

Inflation has been on an upward trend since May 2016:

The ONS said: “Rising prices for food, alcohol and tobacco, clothing and footwear, miscellaneous goods and services were the main upward contributors to change in the rate.

“These were largely offset by a downward contribution from transport, particularly air fares and, to a lesser extent, motor fuels.”

Despite the recent increases in the rate of inflation, it is not above the long-term average:

Howard Archer, chief European and UK economist at IHS Markit, said the data shows there has been “some respite” for consumers and the Bank of England but further rises are almost certain.

He said: “It is odds-on that this will prove only a temporary respite on the inflation front. Inflation was held down in March by Easter-related pricing distortions.

“Specifically, Easter related price hikes (notably on air and sea transport, package holidays, hotels) occurred in March in 2016 but are occurring in April this year.

“Consumers are facing a serious squeeze as higher inflation is occurring in tandem with muted earnings growth – and this looks set to bite even harder over the coming months.”