Inflation rate falls again hitting lowest level in more than two years – what it means for your money
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THE UK's inflation rate fell last month to the lowest level in two and a half years.
Consumer Prices Index inflation stood at 3.2% in March according to new data from the Office for National Statistics (ONS).
Chancellor of the Exchequer, Jeremy Hunt said: “The plan is working: inflation is falling faster than expected, down from over 11% to 3.2%, the lowest level in nearly two and a half years, helping people’s money go further.
This welcome news comes on top of our cuts to national insurance, which save the average worker £900 a year, so people should start to feel the difference as well as see it in their pay cheques.”
Inflation is a measure of how much the prices of everyday goods like food and clothes, and services like train tickets and haircuts, are now compared to a year earlier.
Economists had predicted inflation could fall to as low as 3.1%.
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This month's figure is the lowest inflation rate since September 2021.
The fall is off the back of easing food prices.
ONS chief economist Grant Fitzner said: “Inflation eased slightly in March to its lowest annual rate for two-and-a-half years.
“Once again, food prices were the main reason for the fall, with prices rising by less than we saw a year ago.
“Similarly to last month, we saw a partial offset from rising fuel prices.”
Inflation was at 3.4% in February – down from 4% in January and the lowest since September 2021.
What it means for your money
If inflation is high it means that the cost of your everyday essentials is going up - therefore your money doesn't go as far.
It's important to note that when inflation drops it doesn't mean that prices have stopped rising, it just means they are going so at a slower pace.
The Bank of England (BoE) and the UK's central bank may hike its base rate to try and bring inflation down when it's too high
When this happens people with savings may see a boost but homeowners will feel the pinch as interest rates on mortgages will rise.
But falling inflation offers some hope to mortgage holders and prospective buyers, who will be hoping for interest rate cuts.
Decision makers decided to keep the Bank’s base rate 5.25% last month for the fifth consecutive time.
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