UK inflation drops to 2.5 year low as food prices cool

London, UK – Stabilising food inflation and falling house prices both contributed to UK inflation coming down further in March, leading to renewed hopes that the Bank of England might cut rates soon.

The UK year-on-year inflation report for March 2024 came out on Wednesday morning, clocking in at 3.2%, according to the Office for National Statistics (ONS), marking a decline from February’s 3.4%.

However, it was still above analyst estimates of 3.1%, although the lowest number since September 2021.

Food inflation slowing down was one of the biggest contributors to the decline, coming down to 4% from 5% in the previous month.

Regarding food and non-alcoholic beverages prices, the ONS said, “Prices have been relatively high but stable since early summer 2023, rising by less than 2% between May 2023 and March 2024. This compares with a sharp rise of around 22% seen between March 2022 and May 2023.”